Harvey's Sales Slip 2% In Qtr.
By Alan Wolf -- TWICE, 6/5/2006
Lyndhurst, N.J. — Harvey Electronics, the New York metro area A/V specialty chain, said net sales declined 1.9 percent to $9.5 million for the three months, ended April 29, compared to the same period last year, while same-store sales fell 10 percent.
Franklin Karp, president/CEO of the nine-store chain, attributed the downturn to a scarcity of flat-panel displays and a delay in launching a new advertising campaign. “While there can be no denying that sales remain softer than we had hoped, our results are being impacted by the shortages in flat-panel video product,” he said. “When these products were available in February, and we were able to fill orders, we had a very strong month. However, in April, we experienced slow retail traffic, exacerbated by the continued shortages of flat-panel product.”
Karp said Harvey's custom installation business remained strong in the second quarter, growing by about 5 percent overall, while labor sales increased 22 percent. As retail traffic slowed, custom installation grew to represent more than 67 percent of sales during the second quarter.
To build traffic, the company is modifying its advertising efforts based on feedback from recently held consumer focus groups. The new campaign, to be released during the third quarter, will “reflect current market conditions, customer needs and service demands,” Karp said.
The company is also responding to the sales decline by reducing overhead, but did not provide specific details on what was being done.
For the six months, ended April 29, net sales fell 4 percent to $20.9 million, and same-store sales slipped 10.5 percent year-over-year.
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