Return of Sugar may mean buying for Viglen
Published: 12 Feb 1998 11:30 GMT
Alan Sugar's legendary deal-making expertise is being called on to steady the Viglen ship. The London-based direct seller said yesterday that Sugar is assuming the post of executive chairman and a source close to the company suggests that will mean heading off on the acquisition trail.
The source said that Sugar could help broker a purchase in the next fortnight that would give Viglen more strength in networking and services.
"Viglen needs to move away from being purely a PC player and be able to offer networks and solutions," the source said.
Sugar had originally planned to take a back seat at Viglen, which was spun off from the Amstrad group and floated on the London stock market in the summer. Since then, however, the stock has underperformed and Viglen yesterday announced a 56 per cent fall in profits from £5.13 million to £2.25 million on nearly flat sales of £47.6 million for the last six months of calendar 1997. Stock price was 34.5 pence at close of trading yesterday, compared to a 52-week high of 87.5 pence.
A company spokesman said that the return of Sugar to the front line didn't mean a lack of confidence in Viglen management.
"Remember, Alan has a big stake in Viglen so it's natural he'd want to be involved," said a spokesman. "Sales aren't at all bad, except in the SoHo sector where they are down about 40 per cent, but everybody is having the same problems there."
A recent high-profile deal to co-brand PCs with Microsoft sold through Dixons retail stores has yielded disappointing volumes, he added. Only about 3,000 of the Home Pro systems have been sold so far.
The spokesman said that the work of the Amslit unit set up to deal with Amstrad's legal pursuit of component suppliers had been almost completed, freeing up more of Sugar's time.
He also said that Sugar was spending less time working at Tottenham Hotspur Football Club where he is chairman.
"Alan doesn't need to spend as much time at Tottenham because he has a very good management team there. They may not be playing very well on the field but there's not much he can do about that."
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