Acer EMEA to write-off US$150 million in channel inventory

Acer’s board of directors has agreed to take one-time action on recent findings of high channel inventory and disputed accounts receivable in the Europe, Middle East and Africa (EMEA) operations. Acer will provide channels with US$150 million in sales allowance to clear inventory, which will result in operating loss of the same amount.

The move follows the replacement of former CEO and president Gianfranco Lanci two months ago prompting Acer to a company reorganisation. The new management team carried out internal audits of EMEA operations and discovered abnormalities in terms of channel inventory stored in freight forwarders’ warehouses, and in the accounts receivable from channels in Spain.

The investigation also found areas for vast improvement on managing channel inventory and accounts receivable, making Acer liable for loss. After thorough evaluation, the management team has recommended to the board of directors to take one-time action by providing sales allowance and working together with the channels to solve the current issue, resulting in US$150 million write-off in operation loss. Acer does expect, however, to put business back on the right track soon.

Acer will continue to identify the cause and related responsibility ownership, propose actions and make appropriate workflow adjustments to enhance future management.