Before there was streaming, there was Speed Commerce. Speed Commerce (formerly Navarre Corporation) distributes home entertainment and multimedia software products and provides logistics for major retail chains (
Distribution accounts for the vast majority of Speed Commerce's revenue (about 98% in fiscal 2012 (ends March). In addition to distributing computer software, consumer electronics and accessories, video games, home videos, and more, the company provides logistics services, inventory management, online ordering, and fulfillment services. Speed Commerce's publishing arm, Encore Software, owns or licenses several software brands, which it packages, markets, and sells directly to consumers, retailers, and third-party distributors.
Speed Commerce rings up more than 90% of its sales in the US. The company's international business is growing, while sales are falling in the US.
Sales and Marketing
Speed Commerce distributes to more than 30,000 retail and distribution center locations throughout North America. Customers include major retailers, such as Best Buy, Wal-Mart/
Speed Commerce's revenue has been on the decline for five years now. In fiscal 2012 (ends March) sales fell 2% vs. the prior year, and the company was unprofitable. Cash flow plunged from $14.3 million in fiscal 2011 to a deficit of nearly $5.5 million in 2012. The drop-off in sales was due to lower software sales in both the distribution and publishing segments, and decreased demand for home videos as consumers continued to migrate toward streaming. The lack of new major video game and software releases also hurt sales.
The firm's international business was a bright spot, posting an increase in sales of 36% in fiscal 2012 vs. the prior year. Falling sales and higher operating expenses pushed Speed Commerce into the red.
To regroup, Speed Commerce is returning to its roots in the sense that it is focusing more on logistics and distribution, rather than providing content. To that end, the company has sold its FUNimation business (acquired 2005) to a group of investors for $24 million in an all cash transaction. As part of the deal, Speed Commerce remained the exclusive distributor of FUNimation products in the US and acts as the company's logistics and fulfillment services provider. FUNimation is a leading anime (a style of animation originating in Japan) content provider in the US with titles that include Dragon Ball Z , Darker Than Black , and Robotech: The Shadow Chronicles . Speed Commerce cited differences between FUNimation's strategy and capital requirements and those of its core business as the reason for the sale. The sale also helped Speed Commerce erase its debt.
Going forward, Speed Commerce's strategy is to increase its revenue through the distribution of new product lines, further developing its value-added services and continuing to grow its direct to consumer fulfillment services and international business. To this end, Speed Commerce in early 2012 inked a distribution agreement with Native Union, which designs the POP Phones brand of mobile device handsets. It also acquired SpeedFC, which provides e-commerce services to online retailers and manufacturers the likes of
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