Rexel Inc., the largest single member of IMARK Group Inc., announced plans to leave the buying group effective July 1. Rexel will continue as a member through June 30, which marks the end of IMARK's fiscal year.
In a joint press release issued by Rexel and IMARK on March 8, Rexel said its senior management team reached the decision at its division presidents' meeting on March 6. No reason was given for the decision.
Rexel was not available at press time to comment on why it was leaving IMARK, but the company's decision to pull out of IMARK ends uncertainty over whether Rexel would continue its affiliation with IMARK through Westburne and other individual companies it acquired in the past two years.
“A number of the Rexel entities were part of this group and quite a few were not. So they were half in, half out,” said Steven Cunningham, IMARK's president and chief executive officer. “We knew that they were trying to get to a point where they would decide whether they were going to be all in or all out or status quo, which we thought was the least likely alternative. So this, while a disappointing development to us, comes as no surprise to us.”
Rexel's association with IMARK began in 2000 with its acquisitions of the Branch Group, Upper Marlboro, Md., and Westburne Inc., St. Laurent, Que. The Branch Group and many of the other independent distributors acquired by Westburne and Rexel have had a long association with IMARK and its predecessor groups. IMARK's predecessors include Mid-Atlantic Electrical Distributors Inc. (MAED), which merged in 1987 with Southern Independent Electrical Distributors Inc. (SIED) to form The Independent Electrical Distributors Inc. (TIED). In 1996, TIED merged with Western Independent Electrical Distributors Inc. (WIED) to form IMARK. IMARK was instrumental in the success of those companies, Rexel said in the joint statement.
Cunningham said IMARK's senior executives started preparing for the possibility of Rexel leaving IMARK when Rexel acquired Westburne in 2000.
IMARK also had conversations with its manufacturers and reps in the past couple years and discussed the issue of whether or not Rexel should be in the group and would want to remain in the group. “They have been the subject of a tremendous amount of discussion,” said Cunningham. “This is not a shocking development for anyone. There was a lot of speculation. This simply ends the speculation.”
Cunningham doesn't expect Rexel's leaving IMARK to have any effect on the buying group's remaining 195 members. One of the biggest losses from losing the distributor, he said, comes from the contributions that individuals associated with Rexel and their companies have made to the buying/marketing group over the years.