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Business in the new normal

Michelle Ryder spoke to Christian Schulte, Managing Director, THS Group, about the impact of COVID-19 on the business, and plans to continue doing business in the new normal

It’s been a little over two years since The THS Group, which has a sales and distribution network in more than 30 countries worldwide, acquired Parsia, a company with an almost three-decades-long heritage supplying the channel with a range of OEM and high quality compatible consumables.

The acquisition provided the UK-based firm with a strong platform for growth, giving it access to a much wider product range – up to 3,000 SKUs, as well as software and product solutions that enable dealers to manage contractual devices in the field efficiently and economically, backed by expert technical support.

THS is a long established independent business based in Germany with a high quality manufacturing reputation. It has a comprehensive technical testing laboratory with 150 machines from many manufacturers which its engineers use for ensuring the highest quality standards are met before any products are taken into its range. Every product from consumables to spare parts are subjected to continuous quality checks and go through rigorous testing in this facility. For channel customers this provides them with the assurance that the company’s modified original products provide a lower cost, highly efficient alternative to OEM products and come with the same warranty as an OEM-equivalent.

Schulte said that bringing the two businesses together delivered Parsia a strong competitive advantage and opportunity to grow through an expanded range of products and services. The company recorded strong growth in Q3 and Q4 2019 and in Q1 of this year. “We saw a lot of new business coming through, as more and more dealers took advantage of the opportunity to reduce both direct and indirect costs. Our OEM equivalent products are more cost-competitive with no compromise on quality, while initiatives such as our ability to print bespoke labelling on all products and deliver directly to our customers’ end-user clients for example, reduce the cost to serve,” he explained.

However, with the closure of offices and the resultant impact on print volumes, sales in March through to June dropped significantly. France, Italy and the UK, in particular, were particularly impacted, although business in Germany remained more stable. Schulte said that toner business slumped by up to 80 per cent, while in Germany the drop was significantly less. “Even in the worst month, in our home market, we still achieved 65 per cent of sales we would expect in a typical month,” he said. Business began to pick up again in June. “We are still not yet at normal levels, as a group, we are approximately 10 per cent below where we would expect to be,” Schulte added.

Opportunity for growth
The group’s core business is in the supply of high quality consumables but it also has a software arm, MHS, which is an authorised distribution partner of FMAudit. Schulte sees much opportunity for growth here, the company has invested in a new, state-of-the-art building and is growing the team.

“We are focused on supporting our existing customers as well as building our customer base. We currently manage over 400,000 machines under contract and our goal is to hit the 500,000 mark,” Schulte explained. “Our key message to the dealer channel is that we are well placed to help and to share our knowledge. But we don’t force our customers to use our fleet management solution or select our toners and vice versa. It’s very important to us that our customers make independent decisions. Working together we can provide solutions that provide our customers with a total view over their fleets and help them to improve their profitability. Our offering includes interfaces with ERP systems that can make the entire ordering process digital from start to finish, alongside services including just in time replenishment and providing direct shipments with the machines’ information over printed – all of which can improve the end customer experience,” he added.

The new normal
The business has had to adapt to meet the needs of the new normal, splitting teams to facilitate social distancing, creating two shifts within its warehouse and providing home-based workers with the technology they need to do their jobs remotely. “Delivering excellent customer service is really important to us and while there will be less face to face interaction, we will still continue to stay close to our customers leveraging digital tools such as video conferencing, chat platforms and telephone communication,” Schulte said.

Looking ahead to the future, Schulte said that one lesson learned from the pandemic is that it’s impossible to plan too far ahead and it has had to put plans to celebrate its 25th anniversary year on ice for now.

“The situation is much too fluid at the moment, with changes happening all the time, our primary focus for now is to stay close to our customers and to remain flexible so that we can quickly flex to meet our customers’ needs now and in the future. In this uncertain climate, we believe that will remain our strategy for months to come,” he concluded.