Vobis Microcomputer AG co-founder and chairman Theo Lieven insisted that a price war with Escom AG in the UK high street was not on the cards, despite the Aachen-based company’s assault on the British market through a joint venture with electrical appliance retailer PowerStore Trading Ltd. Lieven said that the two German personal computer manufacturers and retailers would not be slugging it out on British soil: any fight would take place in Germany. The competition there has contributed to German prices being among the lowest in the world (CI No 2,599). Vobis UK Plc is a joint venture with the PowerStore group to sell Vobis’s Highscreen desktop personal computers, together with models from Compaq Computer Corp, IBM Corp and printers from Hewlett-Packard Co, through a network of 87 stores in London, Yorkshire and East Midlands. Vobis will hold 51% and PowerStore 49%. The PowerStore group comprises the PowerStore and HomePower shops that were once part of three of the now-privatised regional electricity companies, together with a number of new out-of-town superstores. The venture is not Vobis’s first toe in UK waters. It had an uncomfortable 18 months selling its machines in the stores of Dixons Group Plc, which demanded price cuts from Vobis when Escom hit the high street in May (CI No 2,661). Vobis said no – it had its reputation to think of, said Lieven – and pulled out of the deal two weeks ago. Vobis, 65% owned by German retailer Kaufhof AG, with 1994 sales of around $1,800m, claims to be Europe’s largest personal computer retailer, cornering around 15% of its domestic market. The new shops will be franchises within PowerStore shops.
Germans are more technical
The first 16 in the London area, will be trading by September 10, with the remaining 71 rolled out by October 1. Newly-built stores, mostly out of town, will feature the Vobis name on the shop fascia, whereas the existing ones will stick with the PowerStore name in London and HomePower elsewhere. Lieven would not rule out the possibility of Vobis’s own stores in the UK outside the joint venture. PowerStore chief executive Bill Colley said the company would build relationships with regional competitors – not necessarily other electricity company shops – to expand the coverage. There are five Vobis Highscreen models in the range. It starts with an Intel Corp 66MHz 4Mb 80486DX2 machine pre-loaded with Microsoft Corp’s Windows 3.1 for ú650. The remaining models, one 80486 and three Pentiums, all with 8Mb RAM and up to a 1Gb hard disk come with Windows95 and the 32-bit version of Microsoft Word. Vobis installs IBM Corp’s OS/2 Warp and Windows95 in its German models, but certain differences between the German and UK markets – apparently Germans are more technical – decided the matter. OS/2 Warp will not be loaded on any Vobis machines in the UK, whereas all Escom machines here come with IBM’s offering. All the UK machines have Intel chips at their heart, though some of the German Highscreen models are based on Advanced Micro Devices Inc processors. The somewhat functional design of the Vobis boxes might prove a tad clunky next to the sleek Compaq machines. Lieven said Vobis had done its homework on the UK market and knew what to expect, but would leave the retail expertise to PowerStore. Colley said PowerStore only knew of the German’s intentions two weeks ago, so it had to move fast to get the shops sorted out for Christmas. The new shops will feature a Smart Configurator terminal, on which customers can order their own tailor-made machine, have it made by robots in the Black Forest and delivered to their UK address within four days, promised Lieven. Marketing will be on a much smaller scale than Escom’s, with Vobis advertising the machines in the computer press and the stores promoted in the local press, on leaflets and through mail shots. Lieven would not make any sales predictions for the venture other than that the market share will be significant. There are no plans for a flotation at present: we’re enjoying ourselves too much said
Colley.
