Retail Flux Continues With Shutdown, Expansions

By Alan Wolf -- TWICE, 5/17/2010

NEW YORK — In a series of moves that have become emblematic of CE retailing, Flanner’s Home Entertainment suspended operations while BrandsMart USA, hhgregg and P.C. Richard & Son have expanded theirs.

Flanner’s, based in Brookfield, Wis. is a family-held one-store operation that temporarily suspended operations late last month due to a cash-flow crunch. The situation has crimped vendor shipments and triggered loan repayment demands from its bank, the local Milwaukee Journal Sentinel reported.

In a statement posted on the company’s Web site, principal John Flanner, a past president of the Professional Audio Video Retailers Association (PARA), said he is “renegotiating our business and financial relationships” following recent challenges, which he attributed to the economic downturn.

“This process has taken longer than expected, and we are no longer able to provide the experience or level of service we strive to provide. Therefore, we are temporarily pausing operations,” he wrote.

The former Progressive Retailers Organization (PRO Group) dealer’s dilemma underscores the challenges facing independents in general and A/V specialists in particular as discounters and e-tailers encroach on core brands and product lines that were once offlimits to those channels.

In the Web statement, Flanner said the company appreciates “all of the support we’ve received as a local, family-owned independent business, and we intend to continue serving this community for years to come.”

Meanwhile, hhgregg continued its Mid-Atlantic rollout with the opening last week of its first six locations in the greater Baltimore area. The 30,000- square-foot superstores are located in Annapolis, Bel Air, Catonsville, Glen Burnie, Hanover and Towson, Md., and their debuts were marked with grandopening ceremonies including ribbon cuttings and sweepstakes that afternoon.

“We are excited to expand our foot-print in the state of Maryland by opening our first Baltimore area stores,” said marketing VP Jeff Pearson. “We think residents will be pleased with the wide selection of appliances and electronics on display,” which includes more than 100 TV models and inventory for more than 500 major appliances.

The stores, part of the company’s planned 45-unit surge through the Mid-Atlantic States, will knock heads with Baltimore-based The Big Screen Store, which operates 14 locations throughout Maryland and Virginia.

Further north, P.C. Richard & Son, which shares with hhgregg a similar business model, mix of CE and majaps, and very soon the same markets in Philadelphia and New Jersey, opened two more Connecticut stores last week, bringing its store count in the Nutmeg State to three.

The new stores are located in Milford in a former Linens’n Things, and in a former Circuit City in North Haven. They join the NATM dealer’s first Connecticut store, which opened last year in Norwalk.

A fourth P.C. Richard store is scheduled to open soon in Danbury, and company president Gregg Richard recently told TWICE that the company could have as many as six Connecticut locations by year’s end.

Richard said the family-held chain was also scouting locations for a regional distribution center and may eventually extend its New England footprint to Rhode Island and Massachusetts.

Further south, the retailer is preparing to open its first two stores in the Philadelphia area, is eyeing Delaware, and is adding two new locations in New Jersey, for a total of seven to 10 store openings this year.

Still further south, BrandsMart USA, the multiregional electronics and appliance discount chain, will open its first small-format store next fall in a former Linens’N Things in Miami’s Dadeland Mall.

The two-story, 44,500-squarefoot location is about half the size of BrandsMart’s typical octagonal megastores, which feature three floors of CE, appliances and housewares.

The company has long coveted the heavily trafficked Dadeland area, president Mike Perlman told the told the Miami Herald, but was precluded by the space requirements of its stores and parking lots, which typically cover 13 acres per location.

The new store, the NATM dealer’s 10th, will sacrifice onsite warehouse space but will still be larger than most competitors, Perlman said.