The legacy brands TDK and Imation will disappear from local retail shelves in 2016 when Imation Corporation exits the global consumer product market and tape media business on December 31. Speaking exclusively to Appliance Retailer, Imation general manager, Asia Pacific Region, Des McDaid explained that the decision was due to the continued declines in traditional media and ongoing market pressures that minimize both the revenue and the profitability for the company.
McDaid, who joined Imation in 2010 advised his retail partners of the closure on Wednesday this week. He described the impact of the decision as “tough”.
“It’s a sad day for the industry when another business close down, especially when Australia was performing well. Sales in our last quarter were strong and we had a great retail customer base,” he said.
Imation ranged Imation and TDK products through Officeworks, Dick Smith, Woolworths and Australia Post. McDaid is responsible for 74 staff throughout the Asia/Pacific region with 28 of those working out of the head office in Sydney’s northwest suburb of Baulkham Hills (pictured).
In his letter to retail customers he explained:
“Imation would like to thank you, as a major Partner, for the continued support and loyalty you have shown the Imation and TDK brands over the years and wish you and your business every success for the future.
Over the next three months our team will work with you, as they have in the past to make any transition required as painless as possible. There will be opportunities for stock clearance and promotional deals as we head into the Christmas period. We will contact you in the next few days to organize a meeting where we can further discuss the exiting of the business and deal with any concerns your business may have.”
From a global perspective
As McDaid said, it’s been tough working for Imation in Australia in 2015 and even tougher if you were on its board. According to global media reports, activist investors at the Clinton Group deposed Imation’s existing board chairman, William LaPerch and its CEO Mark Lucas earlier this year. In a statement, the company said it is “…going to wind down the non-European operations of its legacy tape media business and Consumer Storage and Accessories segment. It will also terminate a long-term licence agreement with TDK, returning that once potent brand back to its owners.
Cash from the wind-down will be invested in Imation’s Tiered Storage and Security Solutions (TSS) segment.Imation is also going to sell its company headquarters, located in Oakdale, Minnesota and its Santiago, Chile and London, Canada properties.
Incoming company president Barry Kasoff said, “These wind-downs are critical in our ongoing effort to create a leaner, more focused Imation. Our TSS segment is the foundation for the Company’s profitable growth over the long term.”
Joseph De Perio, Imation’s non-exec board chairman, added: “Exiting certain legacy businesses will improve our near-term financial performance and position the company for profitable growth.”