HES Survives, Thrives Amid Retail Purge
The BrandSource/AVB and Home Entertainment Source (HES) March Madness Summit convened this March in Dallas amidst a slew of reorganizations, store closings and layoffs among high-profile electronics retailers like REX, Tweeter, Circuit City and CompUSA.
HES General Manager Jim Ristow said the strife amounts to a positive for his membership. “The vendors believe in us,” he said. “They look at us as a national retail entity. We are their only national alternative to the big-box stores for premier electronics.”
Outgoing HES president Bob Cole, president of World Wide Stereo in Hatfield, Pa., said both vendors and retailers “share the same concerns. It’s a very tenuous thing we do for a living. The only things you need to be constant are you, your brand and the people who work for you.” Vendors, he said, realize that “someone has to pioneer their better goods,” which was why five major flat-panel vendors—Pioneer, Samsung, Mitsubishi, Sharp and Hitachi—agreed to offer in-depth presentations outlining their product and marketing strategies to the group.
Ristow, referencing flat panel’s turbulent recent history, characterized the fourth quarter of 2006 as “the perfect storm. At last March’s Summit, we were all saying, ‘We need allocation.’ Suddenly, in August and September, the faucet flicked on and there was too much supply, and the storm was compounded by vendors looking for market share and cutting prices. There were 20 to 30 percent price reductions in less than six months in a category, which had never before been seen. And there were casualties.” But, he noted, those were not suffered among HES members. “We have 675 storefronts, and are up 38 percent in dollar volume since 2005,” he said.
“We will need to sell more units to do the same dollar volume,” said Ristow. “But the good news is there will be more customers coming into [our] stores… For retail-skewed members, your opportunity is your sales floor. If you’re custom-oriented, your opportunities are installation and home automation. We have the tools to help you.”