Disty blames changing business dynamics for demise of its end-of-life services
UPDATE: This story has been updated to include new information from Arrow confirming how the closure impacts all of its ITAD business.
After expanding mightily into ITAD over the past decade, Arrow Electronics this week decided to shut down all of its asset disposition business, saying the unit isn’t meeting financial expectations.
The Lowdown: The move targets end-of-life services for personal computers and mobile devices, as well as enterprise ITAD and data center decommissioning services, company officials confirmed to Channelnomics on Tuesday. As part of preliminary guidance for the distributor’s second-quarter financial results, the company initially said it would wind down just the PC and mobile ITAD units in the U.S. and most other countries by the end of 2019.
“Along with the personal computer and mobility asset disposition business, we will not be retaining the enterprise ITAD and decommissioning services internally,” an Arrow spokesman told Channelnomics in an e-mail. “We do see sustainability as an important element of our overall business strategy.”
The Details: Scrapping the ITAD business, which reports as part of Arrow’s global components arm, will result in a $115 million charge in Q2, officials said.
The company notified affected employees Monday afternoon, shortly before the announcement. Arrow shares were down more than 6% after hours on the news.
Background: Since 2010, Arrow has steadily acquired regional ITAD providers on the way to becoming a top five ITAD provider globally. Arrow’s list of ITAD acquisitions includes Intechra, Redemtech, TechTurn, and Asset Recovery Corp. The acquisition strategy made Arrow a global leader in ITAD service capacity alongside OEMs like HP, IBM, and Dell, as well as specialty ITAD providers like Sims Recycling, Iron Mountain, and ITRenew.
The Buzz: “After careful market analysis indicating that business dynamics have changed since we entered this market, we have decided to wind down operations at our personal computer and mobility asset disposition business,” said Arrow president and CEO Michael Long. “This will allow us to continue to focus on our cross-enterprise strategy to enable next-generation technologies such as artificial intelligence, industrial automation, smart cities, and vehicles.”