Struggling Swiss accessories company Logitech has started discontinuing major product lines after another “significant” sales slump.Overnight Logitech, who has missed opportunities in the sound and attach markets, said they are divesting speaker docks and console gaming peripherals by the end of the year along with their Harmony remote range of products.
It’s also getting out of the video security categories. The Company claims that a major contributor to Logitech’s problems is the slide in sales of PC products and a move by consumers to tablets where Logitech has limited accessories.
Sales for the fiscal-year third quarter were $615 million,down 14 percent from the prior-year period. The company posted an operating loss of $180 million.
Non-cash goodwill impairment charge, estimated to be $211 million.
Retail sales decreased 14 percent for the fiscal third quarter. Sales in the Americas were down 8 percent. They were down 11 percent in Asia Pacific and 20 percent in the Middle East.
Recently Logitech adjusted its range of devices, which now include wireless solar keyboards for Apple Mac, iPad and iPhones. In October, the Swiss based company recently announced products for Microsoft Windows 8, including new touch mice.
Logitech’s chief executive said his company will decide within 90 days whether to sell the video-conferencing arm it bought in 2009 for $405 million after this week writing down the unit’s value by more than half.
The Life-size video conferencing unit has failed to shake up a market dominated by Cisco and Polycom and where Chinese giants Huawei and ZTE are making inroads, while global revenues in the segment have slid as economic uncertainty persists.
Any of the above four companies could be potential buyersfor a small niche player in the $3 billion a year market, analysts said.
Logitech OEM sales have decreased by 23 percent.
Sales for remote controls were down 24 percent despiteLogitech’s launch of its first high-end remote in more than four year, itnoted.
In a statement, Logitech president/CEO Bracken Darrell said:”As we articulated when we started the third quarter, continued weakness in theglobal PC market was the primary factor in our disappointing Q3 results. Theseresults are unacceptable, and we are taking decisive action as an outcome of mystrategic review.”
Logitech will discontinue speaker docks and console gamingperipherals by the end of the year. According to Darrell, it will focus ontablet accessories instead. Its
Ultrathin keyboard cover was again its No. 1 selling productfor the quarter, and the company’s tablet accessory sales have nearly doubledin the Americas.
Net loss for the fiscal third quarter was $195 million($1.24 per share) compared with net income of $55 million ($0.32 per share) inthe prior-year period. Gross margin for
p class=”MsoNormal”>the quarter was 34.2 percent, down from 36.2 percent.