SED International Holdings has built a strong reputation for itself since inception back in 1980, acting not only as Distributor of Choice™ for a broad selection of top computer hardware and consumer goods that range from personal care products to appliances, but also as a master of globe-spanning, custom-tailored supply chain management solutions.
Given the array of proficiencies SED has nailed down through its operations, the company is in a unique position to provide exceptional support for e-commerce, Business-to-Business, and Business-to-Consumer markets, drawing heavily on a massive, 10k partner plus reseller network that covers the US and Latin America. The top vendor names in PCs and Tablets, as well as accessories, components, peripherals, and power supplies, have helped put SED on the industry map as a permanent feature. Tightly-knit supply chain ties have helped SED realize their philosophy of sustainable economic growth, despite the company's rapid logistical ascent over the past three decades as operations have taken off.
One look at the company's recent Q2 FY13 performance and you can tell SED has really pulled out the all the stops when it comes to streamlining domestic operations and focusing on the retail and technology integration channels. Net sales for Q2 were up handsomely over the previous year's quarter on mounting business in consumer product categories, with tablets, notebooks, and televisions all leading as major components of the 23.7% rise. The consumer electronics segment has shown similarly robust performance as end market demand for everything from cameras and home theatres, to e-readers and mobile devices continues to defy analyst estimates.
Operations down in underserved Latin America have choice growth and profitability metrics for SED, and their customer/vendor network in the U.S. is really holding strong. With shrewd leadership driving for even higher operational efficiency targets, the company is now seeking to build upon this foundation and improve overall long-term competitive positioning by further refining U.S. operations. In addition to consolidation from five to three domestic distribution centers, SED is looking to shave selling, general, and administrative expenses by around 25% while drawing down excess personnel. During the consolidation, the company will also look to implement advanced warehousing technology at distribution centers, further improving throughput.
This bold restructuring plan is designed to shore up operations while allowing the company to improve commercial/consumer services via a more complete embracing of cloud computing service models and applications that take advantage of converged data, as well as the full spectrum of voice/video options available, and especially the wildly popular mobile computing platforms. By focusing the company's linecard along these trajectories, SED is moving to take advantage of their already hot IT storage system, small business IT solutions, and merchandized e-commerce fulfillment game.
The same caliber lineup available through SED in the consumer electronics space is present in the company's small appliance segment as well, with top names like Black & Decker, Cuisinart, Panasonic, Proctor Silex, Sunbeam, and T-fal leading the pack. This segment, managed through the company's SED Lehrhoff division, has been a consistent performer and has stood up well alongside the housewares segment (also Lehrhoff), which has brands like AT&T, Bissell, and First Alert among its exclusive range of premium offerings. Lehrhoff also oversees the company's personal care segment, with products like bathroom scales, toothbrushes, and shavers.
One of the most attractive things about SED is the market-space coverage their operational platform represents and it is a healthy mix at that, only slightly more polarized towards retail in Latin America (where retail makes up roughly 40% of operations). The move to restructure and dovetail better into mobile and cloud will speed brand recognition efforts and further cement this diversity advantage. The company's board is supremely confident of the current plan to restructure for improved efficiency and will maintain full force behind the strategic growth plan already underway for the Latin America business unit as well.
SED is one of those superb middle movers that pushes product through the supply chain, leveraging lots of small to mid-sized direct market reseller, e-commerce, retailer, and value-added reseller vectors to create a component architecture that brings products from the manufacturer to the consumer. Solid financials underscore how SED is like one of the supply companies that fueled America's gold rush, only here it is a consumer gold rush into tech and other goods where the company's superior customer service and logistical support capabilities sets them apart from the competition.
SED will be bucking hard against the reins coming out of the gate in the second half of 2013 with their consolidative efforts, which are really just a means of storing momentum for a larger push into markets where they already have a well-established presence. The philosophy of building customer retention and being a Distributor of Choice is indeed sound and this philosophy will continue to serve SED well as they grow the custom-tailored supply chain management services end of the business.
For more information on SED International Holdings, visit www.SEDonline.com
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