Another distributor comes to Canada

Navarre Corp., a New Hope, Minn.-based North American publisher and distributor of home entertainment PC software, video games, accessories, DVD video and music, is looking to expand its business and maintain its level of customer service within Canada in an effort to reach its goal of becoming a $1-billion company.

Navarre was originally founded in 1983 as a music and software distribution company and today, it distributes to over 18,000 retail locations across the continent. Navarre also operates its Canadian operations out of its Toronto-based office. Navarre’s software attributes to over 70 per cent of its distribution transactions and continues to remain the bulk of its business.

Haug Scharnowski, vice-president of corporate relations at Navarre, said the company achieved sales last year just under US$700 million. Scharnowski says looking ahead, the company’s vision is to become a billion-dollar North American company.

“We think Canada especially is a terrific opportunity for Navarre to expand,” Scharnowski said. “So far we’ve been able to grow our Canadian operation with success and we’d like to continue to grow in the Canadian retail environment.”

Brian Burke, president of Navarre, says for Canadian vendors, there are still lots of opportunities in the software market.

“The technology space in Canada is so much broader and greater than that in the U.S. In the U.S., there’s such a broad range of people with such great diversity that in order to maximize the dollars in the business, there needs to be some sort of mass appeal when it comes to products. The level of knowledge is different in Canada, so we find you can deliver more technical products in this space that otherwise may not do so well in the U.S.”

Burke also believes the company’s customer service can differentiate the company in the already crowded Canadian distribution landscape.

“We want to make sure we continue to be competitive with our service,” Burke said. “We want our customers and vendors to see us as experts in the business. We always strive and continue to build strong relationships as we do business.”

Navarre also has two divisions that help make up the company, including the distribution segment, which distributes PC software, DVD video, video games and accessories, as well as its publishing sector, which publishes material with Encore Software and BCI Eclipse. Some of Navarre’s biggest customers are Best Buy, Future Shop, Walmart and Circuit City; while some of the biggest vendors it works with include Symantec, Adobe and Trend Micro.

To help grow its business, Scharnowski says part of Navarre’s strategy will be to focus on its publishing business and its acquisition strategy.

“We acquired FUNimation [an anime company] two years ago,” Scharnowski said. “We took on a $140-million-dollar debt and since then, we’ve paid this debt down. We’ve done a good job digesting this growth well and we’re at a position now where we’re excited for our next wave of growth. We see future acquisitions as part of our growth over the next few years.”

While Navarre does not have any formalized training program set in place for its vendors, Scharnowski said they can always look at Navarre’s packaging and can also go to account managers for help.

“We have different initiatives for the retailers,” Burke said. “For front line products that are on the higher end, retailers can see anywhere between 15 to 20 points on those products. We also offer marketing and support services to them on the retail side too.”

Moving forward, both Scharnowski and Burke said Navarre’s focus is to maintain its North American market presence.

“We have a substantial presence in the marketplace to help people adjust their product mix as they look to shift their shelf allocation to help meet customer demands,” Scharnowski said. “What helps set Navarre apart from other distributors is our level of customer service.”

The company currently houses about 700 employees and has account managers that help support its vendors and customers.

“Our account managers know the content of our products and our vendors really well,” Scharnowski said. “This is good especially if you’re a young start up vendor because we can help find vendors to attract the right audience and buyers.”

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Maxine Cheung
Maxine Cheung
Staff Writer, Computer Dealer News

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