The former PCMall closes its e-retail businesses to focus on data services
September 24, 2014 11:15 AM
PCM Inc. changed its name from PCMall to be taken seriously by business clients as a services provider, and it’s taking additional steps to phase out its retail operations and focus on providing data services to companies.
“Our go-to market strategy is to combine the benefits of value-added service and solutions offerings with the efficient capabilities and high volume sales of a leading direct marketer reseller to create a total technology solution for our customers,” PCM CEO Frank Khulusi said on a recent conference call. “We continue to be very focused and emphasize solutions and services versus just moving boxes.”
To that end, the El Segundo, CA-based company has taken several steps to shuttering its retail operations, both online and offline.
The company announced it will be shuttering its remaining two MacMall retail locations in California. This comes on the heels of its decision to pull the plug July 2 on consumer-focused electronics sites eCost.com and OnSale. PCM is No. 73 in the Internet Retailer Top 500 Guide.
It wasn’t long ago that PCM appeared to be serious about its investments in online retail. The company acquired eCost.com from PFSweb for $2.3 million in 2011, aiming to merge with another e-commerce site it owned, OnSale.com.
“This acquisition will help us broaden our reach into the consumer market,” Khulusi said at the time.
The company instead will be investing more heavily in its service offerings, having recently opened a cloud data center in Ohio as the company’s focus shifts toward providing technology to businesses. That includes selling them hardware, software and related services.
“(With) our former name, PCMall, (it was) very hard to go reach a Fortune 500 CIO and convince them that PCMall, what many people referred to as a catalog company, should go host your data center or provide $4 million annual technology support for your IT,” PCM chief financial officer Brandon LaVerne said on the call. “That was a very hard sell. We think that PCM will become what we make it. Today, it’s very much service-focused, it’s a solution provider and we think it’s something we will build on in the future.”
Amid the changes at PCM, company president Joe Hayek departed in April after six years with PC Mall and PCM.
“We’ve been undergoing a lot of change, repositioning the company to capitalize on all of our resources and experience that we have put together all the years since inception but also moving forward and getting the company ready for the next 27 years,” Khulusi added. “We have a very robust and substantial services business. $122 million, which is about nine percent of sales.”
The company reports that 76% of its revenue in the first six months of 2014 came from its commercial segment, compared with only 11% from the consumer-focused MacMall.
While the MacMall retail locations have been shuttered, the brand won’t cease to exist altogether. MacMall will continue to exist online, and the company announced it has made upgrades to its e-commerce systems in an effort to support that.
“We expect these strategic changes will significantly simplify our MacMall segment, allowing us to increase our focus on its remaining web and outbound business-to-business components,” Khulusi says in a release. “Increasingly, we are engaging with our customers to design, build and deliver leading complex technology services and solutions. We believe this positions us very well for customers who are exploring ways to move to a utility consumption model for their infrastructure as they seek to optimize their own IT environments.