Steady Sales A Virtue During 2002
By Steve Smith -- TWICE, 7/8/2002
As I write this we are approaching the 4th of July weekend and past the mid-year point for 2002. Our issue date is three days short of ten months since Sept. 11. During those many tragic and troubled days last fall time weighed heavily on the hands of everyone. The Holiday Season and even the Spring of 2002 seemed years away.
But time certainly does march on, as the saying goes. The wheel of commerce continues. While Main Street quietly and resolutely moved out of recession, even during a time of terrorism and war, Wall Street stumbled severely in the first half, but not due to those reasons. Good old corporate greed took Wall Street down. Headlines blaring about Enron, Tyco, ImClone, WorldCom, and all the unsavory characters involved undermined investor confidence in the Stock Market.
Yet in the Northeast confidence in the air conditioner was as high as the 90-plus degree heat and humidity. Sales at a P.C. Richard & Son on Steinway Street in New York City's borough of Queens seemed very brisk. On the recent Tuesday night I visited store traffic was so strong that I had trouble getting a parking spot at its lot.
In the world of consumer electronics and major appliances in the United States sales have been good and steady since last fall. Shorter than normal inventories, due to Sept. 11, made certain products scarce during the holiday season of 2001 and the beginning of this year. In discussions I recently had with several industry leaders, the prospects for the second half look good.
As Gary Shapiro, CEA president, said in remarks at the CEO Summit a couple of weeks ago, "Our industry has performed well, especially after Sept. 11." While he said that the CE business benefits from delivering "strong product value" he did note that since last year's Summit, "The world has obviously changed."
Rick Calacci, senior VP/general manager of Sharp Electronics' Consumer Electronics Group, described CE retailing as being stable during the first half, describing the attitude of retailers on the second quarter as upbeat. Still he noted, "The problems at the Stock Exchange has effected some sales in the past 30 days. Enron and other scandals haven't helped."
Alan Lenzmeier, Best Buy's president and chief operating officer, commented that based on his chain's results, and the results of other publicly-held chains that sell electronics and appliances, business should be good during the second half, with gains in the "mid-single digits area." (See story on p. 8.) He pointed out that sales this year would be easier to match in the third quarter than in the fourth because consumers stopped shopping for a period after Sept. 11, and then came back into stores by the holiday season.
So brown goods and white goods have seemed to overcome recession, terrorism, war and the follies of Wall Street as we reach mid-year. But as many have said, during uncertain times no one should sit on his or her laurels. Given all of the economic and political problems we face, the industry should be thankful for the year's accomplishments so far, and grateful that it is in position to have a good second half.
Best Buy's Dick Schulze Takes On A New Role Speaking of time marching on, Best Buy's chairman Dick Schulze has decided to move on, leaving management of the company in the capable hands of company veterans Brad Anderson, CEO, and Allen Lenzmeier, president and chief operating officer. (See p. 1 and special coverage on p. 18.) Schulze will remain an active force as chairman of the chain he founded in 1966. Over the years he has weathered many storms in this business. In the process he changed the face of electronics/appliance retailing as we know it. As senior editor Alan Wolf reports, Schulze decided a few months ago to "broaden my horizons." As he embarks on that journey with his wife Maureen, and their family, we at TWICE wish them all the best.
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