Computer chain will challenge the high street: Russell Hotten on a bullish supplier with big plans to build its market by moving into retail
Sunday 17 January 1993
Peter Rigby, the millionaire owner of Specialist Computer Holdings, plans at least 14 out-of-town outlets, each stocking around 5,000 product lines.
He proposes to invest an initial pounds 28m over two years, but intends to open more 20,000-square-feet computer stores if the first outlets are successful.
SCH's acknowledged success as a supplier of equipment to large corporate customers and local authorities has made Mr Rigby the highest-paid computer executive in the UK. Richard Holway, an analyst who compiles statistics on the top 750 computer services companies, said Mr Rigby's salary last year was pounds 461,540. On turnover of pounds 85m, SCH made pre-tax profits of pounds 5.3m - up 11 per cent on the year - compared with an average decline in profits of 10 per cent for other computer companies.
'Mr Rigby comes in for a lot of stick in the industry because he is secretive. He has a reputation as a hard taskmaster who does not accept fools and layabouts. This, and tight cost control, is the reason for his success,' said Mr Holway.
Mr Rigby took the superstore concept from US- style warehouse computer traders, though PC World is one of several dealers to have opened giant outlets.
But it is high-street dealers such as Dixons and Comet that face the biggest challenge from Mr Rigby's new Byte chain. He said: 'Currently, buyers either go to specialists who don't have the range of products, or go to high-street names who don't have the specialists. That will now change.'
His first store will open outside Birmingham in March, followed by other cities such as Glasgow, Newcastle and Sheffield. 'All the outlets will be financed out of retained profit. It's my money and my reputation at risk,' he said.
About one million personal computers are bought each year, with sales split equally between individual and corporate buyers. SCH already has a profitable slice of the corporate trade - it is IBM's second largest business partner in the UK - and now wants to attack the other half of the market.
Mr Rigby said: 'The potential growth in the PC market means the UK could sustain up to 200 superstores. Obviously that does not mean I have plans for that many, but hopefully we can build a chain bigger than 14 outlets.' SCH insiders have spoken of 24 stores within three years.
A former computer salesman, Mr Rigby launched SCH in 1975 while still in his late twenties. He is dismissive of the rest of the industry. He describes it as 'shambolic' for its over-capacity and talks of inflexible traders who do not react to market trends.
However, computer experts believe Mr Rigby is in for a rough ride. Tracey Snell, of Computing magazine, said: 'There is a risk of saturation. A number of superstores have opened and not done particularly well.'
A rival retailer added: 'No one denies his success as a supplier of equipment to corporates, but retailing is totally different. Success depends on having a large pool of experienced retail managers, and they are hard to find.'
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