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 user 2009-02-03 at 4:43:31 pm Views: 36
  • #21584
    Circuit City was 2 percent of Lexmark’s inkjet revenue
    Chief Executive Paul Curlander told analysts during the company’s
    fourth-quarter earnings call Tuesday that Circuit City, which is
    closing all of its stores, accounted for 2 percent of the inkjet
    division’s revenues in 2008.While that is not a large amount it clearly
    cuts into Lexmark’s consumer electronics presence.”Clearly the
    bankruptcy of Circuit City and its liquidation is disappointing from
    our perspective,” Curlander said.The electronics retailer had been a
    strong partner for Lexmark, and last year the two even cooperated on
    television advertisements promoting Lexmark’s wireless inkjet
    printers.At 2 percent of the inkjet division’s 2008 $1.55 billion in
    revenue, Circuit City would have meant roughly $31 million.

    news comes as Lexmark’s inkjet division continues to struggle, as it
    has since the latter half of 2005.Lexmark products were also dropped by
    Best Buy stores last year.Revenue for the division dropped 28 percent,
    while the number of inkjet printers sold fell 43 percent.Since 2006,
    Lexmark has walked away from 20 percent, and then 30 percent more, of
    its inkjet printer sales, in an attempt to get away from people who
    don’t print enough. It has targeted its products to customers who print
    more, and it has invested in products that are likely to see more ink
    used, such as wireless printers that can be used by multiple computers.

    Jamieson of industry tracker Lyra Research said the relatively small
    amount of sales at Circuit City wasn’t surprising.”Printers are buried
    in their stores,” he said. “It was really an afterthought. And there
    were a lot of brands in there, too. So Lexmark had a lot of
    competition.”One of Lexmark’s largest inkjet customers is Dell
    computers, which resells them under the Dell brand.Dell accounted for
    13 percent of overall revenue in 2008, down from 14 percent in 2007,
    executives told analysts.

    Besides Dell, mass-market stores — the
    Wal-Marts, Meijers and Targets — are a vital place for inkjet. Tom
    Carpenter, vice president and senior equity analyst at Hilliard Lyons
    in Louisville, said he thinks mass market might account for about 50
    percent of hardware and ink revenues for the division.Chief Financial
    Officer John Gamble Jr. declined after the conference call to discuss
    Lexmark’s retail sales.

    Gamble said after the call that the
    company is “working right now” to make sure anyone who bought ink at
    Circuit City can buy it elsewhere.”We have strong distribution today,”
    he said, noting people can always buy ink from posting on
    the site says that besides availability on and,
    “Lexmark will also make these cartridges available at Staples,
    OfficeMax, Office Depot and Inkstop stores in your area as quickly as