President Hench Leaves Edge Distributors Group; Electronic Stockroom Exits As Well

<February 18, 2009>Sources have told the ALERT that Mike Hench, President of LP Hench Co. Inc. and President of the Edge Distributors Group has resigned from Edge last month for multiple reasons, but mostly due to an internal territorial issue. The ALERT has also learned that Edge’s West Coast member, Electronic Stockroom, has left the organization as well.

LP Hench’s distribution company, Electronics Source, has been a member of the Edge Group for about five years. For the last two years, Mike Hench has served as the group’s President. During Hench’s tenure, he led an aggressive public relations and marketing campaign, helping raise Edge’s visibility in the marketplace.

Getting territorial...

The territorial issue that forced this new development, sources say, arose as L.P. Hench Co. recently expanded into the Southeast territory. This expansion was a result of the recent distribution realignment by D&M Holdings in which Hench was awarded the Denon and Boston Acoustics brands for both Florida and the Southeast territories. Sources say that the situation created a conflict with Southeast Edge member B&H Distributing out of Atlanta.

In a telephone interview with the ALERT, Mike Hench confirmed his resignation from the organization. “Edge Group is a great organization with great members,” Hench said. However, “a business opportunity to expand” his company caused him to rethink his involvement in the organization.

Group dynamics have changed...

“Group dynamics have changed relative to what is relevant with what’s going on in the market,” Hench said. “The challenge for any group is to reassess their value to the members” in the wake of changing market conditions.

At about the same time, West Coast member Electronic Stockroom also chose to exit the organization. The ALERT spoke with company President Glen O’Brien about their motivation to leave Edge.

Calling the Edge Group “a great group of people” with whom he remains friends, O’Brien echoed some of Hench’s thoughts. “The dynamics of a group are so difficult…like herding cats,” O’Brien said. “Each member has different needs and different capabilities,” creating challenges to moving the organization forward.

Groups out of balance?

Noting that all groups face the same issue of members forced to balance their individual needs against the needs of the organization overall, O’Brien said the challenging economic environment forced him to concentrate his energies on his own business, necessitating his withdrawal from the group overall.

“There are no tuck-ins or roll-ups in this economic environment,” O’Brien said.

A game of inches...

O’Brien went on to detail how Electronic Stockroom, and its sister company Novidor and Firestone, launched a complete top-to-bottom review of its business structure to squeeze out costs, reduce non-performing lines, and realign its staff to more efficiently address organizational needs. It’s a continuing process that O’Brien says any successful company must engage in if it wants to offer maximum customer service while maintaining profitability in a challenging business environment.

“Business right now is a game of inches,” O’Brien said.

According to the Edge Distributors Group, Vice President Brett Neiderman will take over as President of the group effective immediately. In a telephone interview with the ALERT, Neiderman confirmed the exit of both Electronics Source and Electronic Stockroom from the organization.

It's come to this...

“In both cases, the tipping point was when D&M asked them to be the rep in a territory that they were currently not repping in,” Neiderman said. The resulting increase in their respective workloads meant for both of them that “something had to give” and they chose to exit the group.

“It really came down to a time issue for them,” Neiderman said.

When questioned about the territorial conflict issue in the case of Hench’s resignation, Neiderman said that this issue could have potentially evolved into a conflict, but “it didn’t get to that point” as he claims Hench decided to resign rather than push the matter.

When it comes to issues related to territory, Edge, Neiderman says, works very democratically. “It’s about production, commitment, and support,” he said, referring to who wins a territory assignment to resolve a conflict.

In Hench’s case, Neiderman said, “We wanted him to stay. But he had a lot on his plate.”

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