Programmer’s Bids Adieu to Europe

Programmer’s Paradise’s third-quarter European sales tumbled 37%, to $19.5 million

In a move to bolster its domestic sales, business-to-business software cataloger Programmer’s Paradise is selling its European operations. The Shrewsbury, NJ-based cataloger in December signed an agreement with Leipzig, Germany-based PC-Ware Information Technologies AG to sell its European subsidiaries for nearly $12.8 million. The German catalog company specializes in technical software for computer professionals.

While the sale is subject to approval by company stockholders, who were scheduled to vote on the sale Dec. 21, Programmer’s Paradise chief financial officer William Sheehy expects to close the deal soon after the meeting. Sheehy says the company decided to sell its European holdings to focus on increasing its domestic business. “The North American marketplace is growing, and we needed to increase our market share within North America,” he says. The company’s plans to boost business in 2001 include increasing the catalog’s circulation, though Sheehy won’t cite specifics.

The sale to PC-Ware will not affect Programmer’s Paradise’s 110 domestic employees, Sheehy says. In fact, “our U.S. employees should feel more comfortable knowing that we have more financial resources to focus on our North American business,” he says. As for the employees in the company’s five European countries of operation – France, Germany, Italy, the Netherlands, and the U.K. – Sheehy expects they’ll become part of PC-Ware: “I don’t know of any plans to lay them off.”

A shrewd move The company’s decision to sell its European operations doesn’t surprise industry watchers. “Programmer’s Paradise has been unsuccessful in achieving consistent profit overseas in the past 18 months,” says analyst James Meyer, director of research for Philadelphia-based analyst group Janney Montgomery Scott.

The cataloger’s total net sales for the quarter ended Sept. 30 were $42.3 million, down 16% from $50.2 million for the same period in 1999. Those figures include the company’s European net sales of $19.5 million, which were down 37% from $31.0 million the previous year. The domestic net sales for the quarter grew 15%, however, to $22.8 million from $19.8 million.

Selling the European operations was “absolutely a wise, strategic move on Programmer’s Paradise’s part,” Meyers says. “The sale gets an albatross off the company’s shoulders and gives it a chance to spend time focusing on its domestic business.”

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