Notebook retailers having difficulty clearing inventories in Europe

A week or two ago there was still hope of Windows 10 triggering some laptop replacement demand, but now DigiTimes reports laptop sales are doing quite poorly in Europe. The site heard channel retailers in Europe are having difficulty clearing inventory and experience cash flow problems. The PC market in the US is the only one seeing meaningful growth, as Asia Pacific is also seeing weak notebook demand amidst the slow-down of the Chinese economy.

Several brand vendors like Lenovo and HP reportedly encouraged retail partners to stock up on inventory by offering high commissions, but this is backfiring as Windows 10 failed to kick off a replacement trend.

The retailers have recently started aggressive promotions for notebooks such as buy-two-get-one-free offers, and have been asking brand vendors to extend the collection periods for accounts receivable, the sources said.

As the year-end holidays approach, the sources are concerned that the retailers may reduce their notebook prices further in order to quickly clear up their inventory, but such a move is expected to greatly impact notebook brand vendors' profitability and affect overall notebook sales in the second half.

The sources pointed out that brand vendors such as Lenovo and Hewlett-Packard (HP) have been encouraging their retail partners to stock up since May by offering them high commissions. However, weak demand and Windows 10's failure to kickstart a PC replacement trend have caused the retailers to suffer from high inventory pileup despite their aggressive promotions.