Moving to improve profitability, Sharp Electronics Corp. announced a restructuring of its U.S. Consumer Electronics Group (CEG) that resulted in 30 layoffs.
The plan involves consolidating the audio, video and home appliance sales organizations into a unified sales force within the CEG. The changes, which began taking effect in both the field sales offices and at the company's Mahwah, N.J.-based headquarters the week of June 12, were announced internally today and are effective immediately.
"We're looking to make Sharp much more of a marketing organization," said John Kelly, senior VP of the CEG, adding that the change was crucial to keep up with an increasingly competitive marketplace. Retailers and distributors will be formally notified of the realignment within 90 days, he said.
The cost-saving initiative calls for rechanneling resources to serve the company's top 100 largest national and regional accounts, which together account for about 93 percent of annual sales, Kelly said. Of those 100, about 80 are regional accounts.
The national accounts will see very little change, with appliances to remain marketed and sold apart from A/V products. For the smaller, regional accounts, however, the three product areas will be sold and marketed through the unified sales force.
Sales representatives will begin new assignments on July 5, though Kelly said for the most part, retailers "will have the comfort of having the same person call on them who did before."
Those retailers who provide Sharp with less than $50,000 of sales per year will be serviced by an "enhanced national distributor program," Kelly said, which means they will buy products from a group of distributors that Sharp will choose from its current lot of about 20 regional independent distributors.
"Depending on capability and credit worthiness, there will be some weeding out [of distributors], but that has not been determined," Kelly said. "There's not going to be a widespread dropping of distributors."
Because the company plans in the next 12 months to focus on high-end home entertainment devices, such as HDTV and LCD TVs, it will choose distributors who are well trained and knowledgeable about selling "enhanced technical products," he said.
John Jackson, president of the Independent Distributors Association, said he thinks this change will benefit his eight to 10 members who sell Sharp.
"This is a great year for us. We're getting more and more business from manufacturers who can't afford to sell to the small dealers themselves," he said, adding that he thinks this is a wave of the future.
The independent distributors in his group are already savvy about the high-end A/V products, he said, because they realized long ago that they can't compete with the national chains' prices for lower-end products. "All of our members are clawing their way into the higher-end audio and video categories," he said.
Sharp executive VP Doug Koshima will lead the CEG with support from Kelly. In addition, Bob Walsh will direct the new full-line sales organization and Bob Scaglione will manage the marketing.
The 30 layoffs represent less than 3 percent of Sharp's 1,200 U.S. employees. Terminated employees were offered severance packages as well as placement assistance, a spokesman said. No more "significant reduction" is planned, he said.