Disk Drives Sold at Sears to Bear Maker’s Name : Tandon Sales Pact Seeks Visibility
Companies that make disk drives for personal computers aren’t the best known of firms. Chatsworth-based Tandon Corp. is hoping that will change.
Last week, Tandon and Sears, Roebuck announced an agreement under which Sears will market Tandon’s “add-in” disk-drive systems through Sears’ office-equipment outlets. Add-ins allow users of IBM personal computers or IBM-compatible computers to expand the memory of their machines.
This isn’t the first time Tandon will sell these products in stores. It is, however, the first time they will be sold under the Tandon name.
“It adds some credibility to Tandon,” said Steven L. Ossad, an analyst who follows Tandon for L. F. Rothschild, Unterberg, Towbin in New York. “Tandon can claim that it is a wholesale distributor with a brand image. People can have some confidence.”
Trend Among Manufacturers
Analysts say that selling disk drives through stores is a trend among manufacturers as they move into selling directly to computer users.
James Porter, editor of Disk/Trend Report, said more computer dealers are stocking personal computers from IBM equipped with only floppy-disk drives. The retailers can then earn a profit by adding drives providing much more memory, he said.
The term add-in refers to equipment such as disk drives, installed in computers to increase their capacity.
Ranjit Sitlani, Tandon vice president of planning, said he expects the Sears agreement to generate up to $2 million a month in revenue for Tandon. The products will be sold through the 105 Sears Business Systems Centers, probably by early October, Sears said.
Tandon already has a $27-million contract with GreatWest Technology, which supplies Computerland stores. Those disk drives are marketed under GreatWest’s SYSDYNE! brand name.
Tandon has been hit hard by the computer-industry slump and has lost money for four consecutive quarters. In the third quarter ended June 28, the company reported a loss of $15 million. It made a profit of $10.4 million in the same quarter a year earlier.
