Olivetti Inks IT Net Sales Deal

ROME (05/04/2000) - ICS Olivetti SpA, the company attempting to revive the fortunes of the recently bankrupt Olivetti personal computer manufacturer, has signed a partnership agreement with CHL SpA, the innovative Italian Internet company specializing in the online sale of information technology equipment, the two companies announced today.

Under terms of the agreement, CHL will provide a business-to-business (B2B) Internet platform to handle ICS Olivetti's relations with its suppliers and dealers, a source close to the companies said.

CHL, which was founded in 1993, and has been promoting its online sales through keen pricing and the offer of free holidays, will be responsible for creating ICS Olivetti's new institutional Web site and will also offer ICS products through its own online sales channels, the companies said in a written statement. ICS will offer PCs to CHL customers, allowing them to specify their technical requirements with the help of CHL's proprietary virtual assistant, "Doctor Orange," the statement said.

The agreement means that ICS will improve its ability to optimize the production cycle with the addition of on-demand PC production, ICS Chairman Carlo Fulchir said in the statement. Customers will be able to choose components to suit their own technical requirements and their budgets, Fulchir said. Fulchir, a high-tech manufacturer from northeast Italy, bought Olivetti Personal Computers SpA out of bankruptcy administration last November.

CHL, which serves a registered customer community of some 400,000 IT enthusiasts, will be able to use ICS Olivetti's international distribution network to support its own expansion plans, the statement said.

"We're looking to expand throughout Europe. France, Spain and Germany are the first targets, but we're also looking at eastern European countries," said Silvia Barettini, head of investor relations at CHL in an interview. "Olivetti is also positioned in these countries, so it should be possible to integrate our logistics and distribution with their distribution network."

CHL will be looking to use its Italian business model, involving the combination of e-trade with a vertical portal serving a strong common interest community, wherever it expands abroad, Barettini said. CHL's registered user community currently stands at 400,000 but is expected to grow to between 800,000 and 1 million by the end of the year, she said. The company had just 160,000 registered users at the end of last year.

The company has recently been adding significant portal revenues -- from portal advertising, marketing intelligence and marketplace commissions -- to its traditional e-commerce revenues, Barettini said. It wants to make its business to business (B2B) technological platform available to other companies beyond ICS Olivetti and aims to exploit its strong user base by placing the company on Milan's Nuovo Mercato before the end of May, she said.

"We think we have very good proprietary technology," she said. "Our business-to-business marketplace is definitely open to other companies."

The Florence-based company yesterday announced an agreement with the retail network Mail Boxes Etc. that will allow CHL's customers to receive delivery of the IT, audio-visual and telecommunications products of their choice at the nearest Mail Boxes branch, where they will also be able to pay for their online purchases. The Mail Boxes Etc. sites will complement CHL's existing network in Italy of 33 points of presence, where customers can be helped in their online navigation and handle receipt and payment of their purchases, the company said.

CHL, in Florence, can be reached at +39055 3370 or http://www.chl.it. ICS Olivetti, in Udine, can be reached at +390432 657336 or http://www.ics-olivetti.com

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