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Compaq to Revamp Distribution

May 10, 1999|Associated Press

Compaq Computer Corp. is expected to formally announce plans today to slash the number of distributors that sell its products to four from about 40. The company disclosed the news to some analysts late Friday, said Ashok Kumar, analyst at U.S. Bancorp Piper Jaffray. This would be Chairman Ben Rosen's first major move since replacing Eckhard Pfeiffer as chief executive last month. The idea is to enable Compaq to reduce costs, better manage inventory and track demand. Kumar identified Ingram Micro of Santa Ana, Merisel Inc. of El Segundo, Tech Data Corp. of Clearwater, Fla., and CompuCom Systems of Dallas as the surviving distributors. The companies already work very closely with the Houston-based computer giant. In heavy trading Friday, shares rose 13 cents to $24.75 on the New York Stock Exchange.

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