WESCO buys utility distributor
WESCO International Inc., Pittsburgh, is expanding its coverage of the utility business in the West with the purchase of Herning Enterprises Inc., a major utility distributor serving utility and telecommunications contractors in urban areas of California, Washington, Arizona and Utah.
Herning, with 2000 sales of approximately $112 million, has six sales and service locations in California, along with operations in Seattle, Tucson and Salt Lake City. Products that Herning supplies include high- and low-voltage cable, splicing and termination products, high-voltage switches, distribution transformers and PVC conduit.
Over the past several years, WESCO has been expanding its presence in the utility market. In 1999 it acquired Diversified Electric Supply Co. Inc., North Little Rock, Ark.; Hamby-Young Power Products, Aurora, Ohio; Maydwell and Hartzell Inc., Brisbane, Calif.; and Power Supply Inc., Houston. Last year, it acquired KVA Supply Co., Denver.
Fresh financing gives IDEA a second chance
More than two dozen of the electrical industry's largest distributors and manufacturers have pledged their continued support for the Industry Data Exchange Association (IDEA), the organization built to lay the foundation for industry-wide electronic commerce. Altogether, 28 electrical distributors and manufacturers put up a total of $2 million in financing to keep the IDEA alive, IDEA announced in March.
The financing will go to improving the IDEA's Industry Data Warehouse (IDW) and expanding the features and services of the Industry Data Exchange (IDX) in an effort to attract a larger base of users, said Michael Rioux, president of the organization. It will also let Rioux hire the staff needed to run the organization and implement its marketing and sales plans.
Despite initial expectations of industry-wide support, the IDEA, jointly owned by the National Association of Electrical Distributors (NAED), St. Louis, Mo., and the National Electrical Manufacturers Association (NEMA), Rosslyn, Va., has succeeded in attracting just a fraction of the membership of either association. Less than 10 percent of the associations' members actively use the service. That 10 percent includes some of the industry's heavy hitters, and the data involved covers approximately 80 percent of the SKUs used in the industry, according to Rioux, so the data service has much of the critical mass of data it needs to be useful to distributors. Nonetheless, the low rate of acceptance was a distressing sign.
With the money and business plan in place to move forward, the organization is developing new features and services to attract more members. The new core software in the IDX network enables the use of XML coding, flat files and binary documents. IDEA now is going to work toward adding new capabilities such as Internet access, end-to-end reporting and EDI translation at the network core.
Bestroute.com to shut down
Bestroute.com LLC, DeWitt, N.Y., an online distributor of slower-moving inventory, will cease operations.
Hughes Supply, parent of bestroute.com, and the management team of bestroute.com said it was shutting down bestroute.com because of lower than expected usage by users who still prefer to stick with traditional purchasing methods. Hughes expects the after tax write-offs for the fourth quarter from discontinuing this operation to be approximately $7.7 million.
“Our involvement with bestroute.com started two years ago when we thought that the Internet might disintermediate traditional wholesale distribution,” said David Hughes, the company's chairman and chief executive officer. “We looked at the bestroute.com investment as being a proactive and prudent defensive part of our overall e-commerce strategy. The bestroute.com investment was based on the prevailing expectations at the time that the Web would rapidly evolve as a tool that our customers would use to order material and reduce costs. Unfortunately, we have found that this has not been the case to date. Our customers have found the content to be of value, but they are not using the Web site to order or buy material at the adoption rate we had hoped.”