Roy, Utah-based Iomega Corp., a maker of high-capacity diskettes, drives and other data storage products, is looking in Lake Forest, Rancho Santa Margarita and Foothill Ranch to relocate its headquarters, a company spokesman said.
The company also is considering San Diego but Orange County is at the top of its list, according to spokesman Chris Romosa.
“Orange County is a very attractive location,” Romosa said. “It has the right kinds of companies we can do business with, and it’s a central location for our executives who want to live in San Diego and commute.”
Romosa declined to comment on when the company might make a move except to say it likely would be “sooner rather than later.” He also would not disclose which real estate brokers Iomega is working with or how many square feet the company hopes to lease. He did say Iomega plans to move some of the 500 people it now employs at its headquarters outside Salt Lake City to the new location.
“We will be hiring additional employees,” he added.
OC’s labor pool and cluster of data storage companies are a lure for Iomega, Romosa said.
“That alone makes it an attractive location,” he said.
Iomega, which is struggling to turn itself around, hopes a relocation will help lure new talent,engineers and others who may not have considered the company before because of its location. The company plans to keep a few facilities in Utah after the move, Romosa said.
Iomega’s planned move comes after several years of declining sales,a trend that management has worked hard to reverse. Annual revenues have dropped some 25% from $1.7 billion in 1998 to $1.3 billion in 2000. Profits have been squeezed as the competitive landscape for storage has tightened. Iomega has seen demand for its Zip and other products wane with bigger PC disk drives and the growth of recordable compact discs.
In 1999, the company closed several facilities and laid off about 450 workers, including some in San Diego. Last year, the company turned a profit of $170 million, vs. losses in the two prior years.
Even with slumping sales, Iomega would be OC’s fifth-largest hardware maker in terms of revenue. By market value, Iomega would be in the middle ranks of local public companies. Last week, Iomega counted a market capitalization of about $370 million.
Iomega’s Zip drives and diskettes store about 100 megabytes of data. The company originally sold its drives and disks separately. But as sales slipped, the company struck deals with several computer makers, including Compaq Computer Corp. and Toshiba Corp., to include the drives inside their machines. Sales through PC makers now are about 15% of sales. But the move hurt profits at Iomega, as PC makers have pushed for lower prices on the drives.
The company has diversified into other types of products, including personal audio players, digital image viewers and drives that store larger amounts of data than the Zip drive. n
