CIRCUIT CITY WAS 2% OF LEXMARK's INKJET REVENUE

[Anonymous]

http://www.kentucky.com/211/story/680221.html
Circuit City was 2 percent of Lexmark’s inkjet revenue
Lexmark
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.

The
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.

Larry
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 Lexmark.com.A posting on
the site says that besides availability on Lexmark.com and Staples.com,
“Lexmark will also make these cartridges available at Staples,
OfficeMax, Office Depot and Inkstop stores in your area as quickly as
possible.”

[Author]

February 3, 2009 at 4:43 PM