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Q&A With D&H Distributing's Senior VP Jeff Davis

9/07/2015 08:15:00 AM Eastern

D&H Distributing is bucking the trends.

The national IT and CE distributor reported that it’s outperforming its two-step peers and is successfully managing its PC business amid falling industry demand.

Specifically, the 97-year-old Harrisburg, Pa.-based business posted an 8 percent year-over-year sales increase for its first fiscal quarter, ended July 31, with much of that growth coming from such hard-pressed product categories as video, home entertainment and computing.

How’d they do it? And what’s their forecast for the holiday season to come? TWICE recently chatted with D&H senior sales VP Jeff Davis, who shared some of the distributor’s insights:

TWICE: The trade tells us that business was choppy this summer, and here you are posting an 8 percent increase for the May-July period.

The same thing happened when the marketplace struggled in 2009. We’re a resilient organization.

The PC business is steadily declining, but for the past quarter our notebook business was up 24 percent; our desktop business was up 28.8 percent; and Chromebooks were up 48 percent. And that’s on top of last year’s increases following the Windows XP ‘refresh’ [when Microsoft ended support for the outdated OS].

By comparison, Synnex, Tech Data and Ingram all recently posted flat or lower results.

TWICE: OK, so what’s your secret?

We’re taking share from the competition; we’re getting share at retail and at e-tail, and are seeing strong growth in the VAR [value-added reseller] channel, particularly within the server market.

We’re diversified, which makes us more attractive to dealers. Besides IT, we offer gaming, housewares and small appliances, and provide a wide range of services like same-day shipping and white-glove delivery.

We’re also growing with several large e-tailers and retailers, and are exploring new sales opportunities like K-12 [the educational market].

TWICE: What about emerging technologies?

Fitness bands are doing very well, and we’re forming new partnerships in 3D printing.

It’s not IoT, but 2-in-1 notebooks are also a highgrowth area.

TWICE: Speaking of notebooks, have you seen any uptick from this summer’s launch of Windows 10?

So far we’re hearing very positive feedback about the operating system, although I’m not sure of its impact on the business side. It’s not a game changer, although it’s bigger than Win8 was.

TWICE: With T-Mobile and Asian smartphone makers disrupting the cellular market, do you see any opportunity in unlocked phones?

More and more manufacturers are coming to us with product. I think this category can more than make up for the decline of tablets.

TWICE: How was back-to-school season?

The Chromebook season ended in August, which was the highereducation part of the selling period. It drives new notebook sales and dormrelated products. We haven’t tabulated all the numbers, but I’d say we got off to a good start.

TWICE: What’s your outlook for holiday? Are we in for another promotional knock-down drag-out?

Well, the promotions are definitely starting earlier, and what was Black Friday has now become the whole month of November.

TWICE: What are your holiday picks?

We think computers and gaming will be strong; there are pockets of opportunity in both those industries. The TV business is still very tough, and relatively stagnant.

TWICE: What about 4K? Isn’t that revitalizing video?

There’s still not enough content out there. Plus all the forward-looking talk about “Super 4K,” or 6K or 8K tends to freeze the consumer.

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