2002 Starts Off With A Bang
By Steve Smith and Alan Wolf -- TWICE, 3/18/2002
Orlando, Fla. — Most NATM dealers and key vendors who gathered here last week for the buying group's annual meeting said they're kicking off 2002 with a bang.
"The business has been strong," said Philips VP/sales John Riddle, who, thanks to changes in distribution, was able to bring the brand to its first NATM meeting since 1996. "I think it has caught the electronics and appliance industries by surprise. Housing starts look good so far this year, which is good for the industry. The home is becoming the center of entertainment, so that is very beneficial to our business."
Similarly, Kenwood VP/sales Bob Law is also seeing strength in the market. "Car audio has been strong across the board," he reported. "Sirius pretty much sold through all of our units and we plan to increase production. Home theater in a box has been another good category for us."
On the dealer side, "Things are beginning to turn around nicely," said Cowboy Maloney CEO J. Con Maloney, who attributes the post-9/11 rebound in brown and especially white goods to the "cocooning" effect. "People are now realizing that the world ain't coming to an end, they're confident that they'll have their jobs and they're spending that disposable income."
Maloney is anticipating a "particularly strong year" ahead, despite dwindling margins. "We're like piranhas sometimes. We eat our young. So unfortunately profit is tied to volume for smaller dealers. We lose money on every sale, but we make it on manufacturers' volume rebates. If you can generate volume, you can make a living."
But Darrell Chabino, president/CEO of Sight 'n Sound, questions the rosy CE reports. Although business in HTiB has been brisk, "I have trouble buying that CE is up 10, 12, or 15 percent so far this year. We have been struggling to hold even."
By contrast, Chabino's appliance business is exploding. "Sales have been strong. Laundry is up 40 percent," he said. "There is pent-up demand there. Appliances are must-have items, and consumers have come back to retail really strong."
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