Digiland founder returns

Digiland founder Laurie Carmichael has returned to rescue the struggling distributor with a plan to morph the company into a niche player.

Carmichael – who founded the company in 1994 and built a $120 million operation – quit in 2000 for medical reasons. Five years later, he has returned to rebuild the distributor following a big decline in sales since his departure.

Carmichael said Digiland represented 15 years of his life. Since leaving, he had been running a business importing digital home products.

“I believe in the saying that, for distribution, you get big, get niche or get out. The big players have decided – they have invested heavily in infrastructure and logistics,” he said.

As a result, Carmichael – with the financial support of publicly listed Singapore-based Digiland International (DIL) – will steer the company into the niche distribution market.

“I attended a business planning meeting in Singapore during Christmas and New Year and we have identified a number of markets where we see opportunities for success across South-East Asia.

“Those markets include the digital home and internet appliances for small businesses. Our business model will be based on importing products that we have identified in these markets from Singapore, Taiwan and the US,” he said.

Seventy-five percent of Digiland’s product shipments would be imported with the rest coming from local suppliers, Carmichael said.

“There are also opportunities for services income from some of these markets. DIL knows the services business very well, having built a successful subsidiary company with Infonet Systems and Services in Singapore.”

Carmichael said he needed DIL’s help to be successful in Australia. “They have already supplied staff from Singapore as well as logistical and financial support.

“I am buoyed by the number of customers that have already contacted me requesting further details on our new product range. We are hiring people and have a big job ahead of us restructuring the company.”

At its peak, Digiland had 50 staff in Australia. Today it has six.

Last September, Digiland reported a US$10.1 million loss for its Australian operation. Australian sales dropped from US$79.1 million 2002-03 to US$27.3 million last financial year.

A planned partial merger between Digiland and distributor eXeed was called off in October 2003 following a disagreement over price.

Under the arrangement, Digiland would have offloaded its branded vendor contracts to eXeed.