What A Difference A Year Makes

By Steve Smith -- TWICE, 5/17/2010

Last May the PRO Group and its suppliers met at the Ritz Carlton in Lake Las Vegas, Nev., a resort that soon closed after the convention left town.

The fate of the upscale resort was a metaphor on the state of the economy and the state of the CE industry last spring.

Earlier this month, PRO held this year’s meeting at its traditional venue of the Hyatt Regency at Gainey Ranch in Scottsdale, Ariz. Based on what I heard at the meeting, what a difference a year makes.

PRO is predicting a sales increase for its group, based on an economy that is slowly turning around and plans by several members to expand their operations.

Sales have been up in TVs, and with inventories being strained, pricing is relatively flat — which in that business is like a price increase. Home audio is even taking a turn for the better.

Pent-up demand for existing products and attraction to new technology, like 3D TV, IPTV features, sound bars and the like, are driving the businesses of specialty retailers.

Expansion is still being pursued by PRO’s Sixth Avenue Electronics and Paul’s TV, NATM’s P.C. Richard & Son and BrandsMart USA and multiregional hhgregg.

But while all this is good news, coupled with improved financial reports by publicly held companies in recent weeks and supplier promotions, this is just the beginning of a turnaround.

Famed PRO member Flanner’s Home Entertainment suspended operations just before the group meet in Scottsdale. Others have closed, cut back on operations or worse in the past couple of years.

And when you look back at 2009, as we have done in this issue with TWICE Top 100 CE Retailers report, even this elite group was challenged. It had a modest 1.8 percent gain in sales vs. 2008. Individual performances in the report show ’09 was rugged for just about everyone.

Which is why, as we emerge from this recession, what Jim Ristow, executive director of Home Entertainment Source, told TWICE at PRO rang true: “We believe that we are in the midst of a continuing consolidation. Those that are left will dominate.” Ristow then added, “And we [HES and its partner PRO] intend to be around.”

Survival of the fittest in the CE business continues as a theme in this industry.

Kudos On The Top 100
A tip of the cap, and much more, to senior editor Alan Wolf and our research partner for the annual TWICE Top 100 CE Retailers report, The Stevenson Company, for another great job. Kudos also to managing editor John Laposky, associate editor Lisa Johnston and our freelance graphics expert Desiree Nunez for editing and designing this issue, whose deadlines occurred smack dab in the middle of a move of offices and computer systems.