After yesterday's announcement that Siltek, the country's largest distributor, had applied for provisional liquidation, fellow distributor Tarsus and retailer Incredible Connection both released statements attempting to allay investor concerns that they could be affected by Siltek's financial troubles.
JSE-listed Connection Group, holding company of IT retailer Incredible Connection, assured investors it would not be adversely influenced by Siltek's troubles, saying it had foreseen the financial difficulties and had for some time been reducing its exposure to Siltek which was its largest supplier.
The group's management says it is confident the contingency plans in place will minimise any disruptions.
Tarsus, fellow distributor and long-time competitor to Siltek, says the gap left by Siltek will be capitalised on, although it will be done in such a way as to assure Tarsus's continued growth.
As an MB Technology subsidiary, Tarsus operates in the same market as Siltek's distribution company SDD. Tarsus MD Guy Whitcroft says he has received a number of calls from resellers wondering if the company is facing similar troubles to SDD.
Whitcroft says Tarsus will remain focused on its core products, which have over time proved to be profitable for the company, and it will not be lured into expanding its lines.
"We will not be adding another 30 brands to our current line. We have always concentrated on those products which secure us a profit. In the past we have been fairly ruthless and cut brands if they proved unprofitable; this will not change."
Whitcroft says yesterday's news has not sparked panic with the vendors Tarsus deals with.
"We have lines of credit with our vendors and they have sight of our financials. They have seen MB Technology's results and know we are secure."
He says the difference between Tarsus and SDD is tight management, good logistics and forecasting, which means stock moves quickly. At the end of the last financial year, Tarsus had reduced its stock-holding days down to 18 and debtor days to 38.
Whitcroft also announced extended trading hours from today (7.30am to 6pm), to assist its channel partners "to continue operating to their full potential".
He adds that he will pay close attention to developments at Siltek, particularly to possible management buy-outs, before any changes are made to Tarsus's current status.
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