Harvey Electronics Agrees to Acquire MyerEmco
In a surprising turn of events, struggling New York-area custom retail chain Harvey Electronics announced an agreement to acquire the similar-minded but consistently profitable Washington, D.C.-area MyerEmco AudioVideo chain. As such, the combined entity will become, in Harvey’s words, “the leading high-end custom installation business from New York to Washington, D.C.”
Publicly traded Harvey hopes to “more than double its size” by adding privately-held MyerEmco’s 10 Washington-area locations. Harvey currently operates nine locations in Manhattan, North Jersey, Connecticut and Long Island.
MyerEmco President and COO Gary Yacoubian would assume the same role at the combined company, as would Interim CEO Martin McClanan. MyerEmco CEO and Principal Owner Jon Myer’s role in the company is yet to be determined. (See our exclusive interview with Yacoubian).
The closing of the transaction is subject to financing and other customary contingencies, Harvey noted.
Both companies are members of the Progressive Retailers Organization (PRO) buying group. The combined company will continue with the PRO Group.
In March, Harvey announced results for its first 2007 fiscal quarter, ended January 27, reporting a loss over just over $1 million and a 26.1 percent decrease in net sales revenue. It blamed the bad results on an over-reliance on flat-panel television sales, whose prices rapidly compressed during the holiday season. “The strategic opportunity for Harvey is to expand upon its leadership brand position and to grow its custom installation and emerging technology businesses,” the company stated.
Harvey also was still absorbing the private placement of a $4 million preferred equity infusion in the company; McClanan noted at the time that Harvey would “aggressively pursue strategic initiatives designed to reinvigorate sales and return the company to profitability.”
Perhaps tipping his hand, Harvey Chairman Andy Stackpole said at the time, “I am heartened by the progress to date, and remain convinced that we have the right brand, extraordinary products, and some of the best people in the marketplace to take advantage of the custom installation opportunity in the New York Metro area, and beyond [Ed. note: our emphasis].”