Tweeter Resuming Store Re-Modeling Program; Outlines Go-Forward Strategy
By Alan Wolf -- TWICE, 7/19/2007
Canton, Mass. — Tweeter Newco, the newly formed, privately held portfolio company of Schultze Asset Management, will immediately employ funding from its new owners to resume its store remodeling program.
The chain has earmarked 40 stores for partial retrofits that will incorporate key features of its next-generation “Playground” format, which uses notional spaces to show A/V products, systems and controls within home-like settings. The company currently operates six Playground stores, which are exceeding older format units on a range of performance metrics.
In his first conference call following last week's acquisition, president/CEO Joe McGuire said the retailer is presently drawing up a timetable for the conversions and expects work to begin on the first 10 stores within the next two weeks. The remodeling will proceed through October, pause for the holiday selling season, and resume early next year.
Locations were selected on the basis of providing “the most bang for the buck” and fastest turnaround times, he said.
Looking back on the events of the past week, McGuire described an “unbelievable change in mood” at the company once the $38 million acquisition was completed. The Schultze buyout allowed Tweeter to put its Chapter 11 bankruptcy behind it and attain a fresh start, he said, although the bankruptcy was one of the “cheapest” in CE retailing, with the old Tweeter Home Entertainment Group owing less than $4 million to the trade.
The chain begins life anew as a $500 million a year concern, down from $775 million in 2006, with 103 stores, 2,000 employees, and its management team, buyers and vendor matrix essentially intact. No further store closings are presently planned beyond last spring’s 49 lease terminations, nor are there any current plans for additional layoffs.
Asked about Schultze’s decision to retain McGuire and his executive staff, the CEO replied, “Schultze bought more than just the assets of Tweeter, it bought the strategy, and this management team is the architect of that strategy.”
Tweeter will also maintain its membership within the Progressive Retailers Organization, or PRO buying group, which re-admitted the newly formed company on Tuesday.
Going forward, Tweeter will continue “to drive higher-end, elegant solutions to a discerning, upper-end portion of the CE industry,” McGuire said, and will work to migrate its revenue mix from the current 65 percent retail, 35 percent custom installation to a 50-50 split.
He described the vendor community as extremely supportive of the acquisition by Schultze, and said he expects to begin re-establishing regular terms with manufacturers once confidence in Tweeter is restored.
Chief marketing officer Patrick Reynolds added that Tweeter will mount a new mass media marketing campaign within the next 30 to 60 days that will use a “narrow and deep approach targeted at discerning customers.”
-
With Video profits gone, Walmart/Costco selling comparable digital product (the great equalizer) all thats left is labor and products involving complicated programming and install. You don''''t need huge stores to do that. They are being Kmart''''d, to small to compete on price, to large to compete on service. Shame, lot of nice people work there.
Prognosticator - 2007-24-7 17:57:00 EDT -
I have to agree with most of the comments that I''ve seen regarding Tweeter''s most recent "plan". Simply redecorating the stores isn''t going to change the way the company has been run for the past several years. Does the executive team really think that buyers are that stupid? Change the layout, change the logo, new slogan every few months. . .same old Tweeter.
The second Las Vegas store was open less than two years. So much for the "playground model".
GM - 2007-24-7 12:00:00 EDT -
The longevity of Tweeter and any chances for success are minimal with the current CEO and upper management team. They have a proven record of failures and unsuccessful business plans to compete in an ever changing, fast paced industry. They have padded their pockets with undeserved salary increases and have the nerve to request additional bonus’s as a reward for bankrupting the company and causing stock holders to lose their entire investment. The company has rapidly declined since Joe McGuire took control of the company and without new leadership and fresh marketing ideas, Tweeter’s history will repeat itself and the company’s demise is inevitable.
Little Guy - 2007-20-7 11:36:00 EDT
No related content found.
VIEW ALL GALLERIES