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Manfred Schmitt removed as Escom CEO
Translated from Die Welt by Sven Tegethoff (email@example.com)
Managing director of "Escom AG" forced to resign
Founder of discount-retailer for computers draws consequences from last
years high losses - Helmut Jost announced to be the successor.
Berlin - After high losses of 125,000,000 DM, the managin director of the
computer company located in Bochum, Manfred Schmitt, is going to leave the
company by the end of the month. Yesterday, Escom announced that the board
directors appointed Helmut Jost as the new Managing director from the first
of April. 43 year-old Mr. Jost was already active once in Escoms board of
directors from 1993 to 1995, before taking over the management of IBM's
An Escom spokesman in Heppenheim said, that Escom-Founder Schmitt had
offered his position by his own wish after the huge deficit, and annouced
he wants to take the full responsibility. Escom, with a turnover of
2,350,000,000 DM, were following some ambitious goals, but went out of
financial breath on them. Schmitt pushed the building up of an own retail
chain in Great Brittain, for example. Though these investments seemed to
be the strategically correct steps into foreign markets, they took too much
capital, and didn't bring enough income. The english PC market proved
itself to be just as tired as the German one nowadays. Generally, the weak
demand and the enourmous drop of prices on the PC market forced down
Escom's turnover and margins. Escom-Chief Schmitt's Multimedia-Plans also
proved as too high. Their potential partner RWE Telliance, a daughter of
electricity provider RWE, retired from their interest because of Escom's
financial situation. Banks and shareholders promised the company
100,000,000 DM of financial support (60,000,000 DM from a raise of assets),
to overcome the financial bottleneck.
The telephone company from Kiel by the name of "Hagenuk", which Manfred
Schmitt privately bought out from the "Preussag" in Oktober, caused further
Irritations among Escom's stockholders "Quelle" (25%) and "Siemens Nixdorf"
(SNI, 12.5%). It was Schmitt's plan to let the company sell cellular
phones via his Escom shops, about which the aforementioned two shareholders
didn't agree at all.
Even after his retirement to the board of shareholders, Schmitt is still
currently holding 23% of Escom's assets. Escom's share price rised up to
13DM yesterday, after 12.7 DM on Tuesday.