Nationwide Looks Ahead Post-Guttman

Las Vegas— Nationwide's biannual meeting and convention, held here earlier this month at Caesar's Palace, was a bittersweet affair as the industry's biggest buying group bid farewell to a fallen leader and looked ahead to a challenging, though promising, future.

The PrimeTime! convention kicked off with a moving tribute to president and group co-founder Lee Guttman, 65, who died suddenly of a heart attack two weeks prior to the show. Senior management scrambled to fill holes in the itinerary where Guttman was to deliver his traditional pep rally and rant against complacency in the face of big box competition, and stressed the status quo in calming any dealer or vendor qualms over succession.

"Lee knew that success comes from trust, relationships and making everyone win," director Ed Kelly assured attendees, "and we will lead using the same principles."

Added director Robert Weisner, "Nationwide will move forward … and will continue to support vendor partnerships."

Under the succession plan, which had been in the works for a year, Kelly, a fellow co-founder, has assumed the title of interim president. In addition, director Les Kirk was named chief financial officer, and Weisner will oversee the three-person merchandising team, previously led by Guttman.

Kelly, whose term as interim president is open-ended, compared his role to that of senior partner in a law firm now that Guttman is gone. "As you develop people and work your plan, at some point someone will replace me," he told TWICE.

The group — which has been renamed Nationwide Marketing Group from Nationwide Television & Appliance Associates to better reflect its member services — also plans to expand the merchandising team and other areas where needed.

"We can't fill Lee's shoes. He was a unique and special person," Kelly said. "But we're thankful for the vendor and member support, and are blessed that the succession plan was in place."

Also working in Nationwide's favor is its advanced planning, which will carry the group through the transitional period. "We're so far out in our planning, things are already in motion," Kelly explained.

Member dealers, many of whom first learned of Guttman's death at the meeting, were shocked and mournful over his passing, but were also confident that the group is bigger than any one individual. "You're always uncertain about change, but the group's leadership is strong, and the merchandising and vendor contacts were handled by many people on staff," observed Steve Bell of Archer Home Center in Adel, Iowa. "I will miss Lee personally, and his unique charisma, but I don't think it will have a big impact on the group as a whole. The group will stay the course."

Keynote speaker Mark Chambers, VP/regional sales for Electrolux Home Products North America, concurred. "It's bittersweet that Lee isn't here with us," he told the crowd, "but the Nationwide team is committed to the same values."

Kelly noted that management's first goal, following Guttman's funeral, was to assure that the convention would go forward. "Once we get back," he noted, "we will keep moving on with our plans."

Those plans include a beefed up marketing effort for the fourth quarter that will encompass extended terms and TV spots and holiday promotions featuring New Age music and marketing group Mannheim Steamroller, plus a national rollout of the group's fledgling e-commerce site BrandsDirect.com.

The Web site, which has been under development for about 30 months, "was a bigger project than I anticipated," Kelly conceded. But now that it's fully operational, and supported by a newly built call center near Nationwide's executive offices in Winston-Salem, N.C., BrandsDirect will be able to "drive business back to the local retailer" via ZIP code-based referrals, and serve as an important adjunct to sales.

Nationwide management is also excited about the next PrimeTime! event, which it says will be big enough to fill the Superdome. The group has booked the celebrated New Orleans stadium for a four-day run from Feb. 11 to Feb. 14, 2004, where some 175,000 square feet of vendor exhibitions and displays will await attendees.

Kelly's other overarching goal is to encourage dealers to trade up their assortments and expand their accessories offerings in order to boost their average tickets. "The biggest challenge," he said, "is price erosion. Dealers must pay attention to the average ticket. Once a sale falls below $499, there's not enough gross margin dollars there to support their business."

"Dealers working off commodity goods are going up against the big boys," he continued. "I ask them, "Are you selling accessories? Because you could double your bottom line if you work it and are serious about it.'"

To support accessory and add-on sales, Nationwide is establishing a sourcing office in Hong Kong in order to import products directly, Kelly noted.

But despite big box competition and the still sluggish economy, dealers were generally upbeat about business, thanks in no small part to the continuing housing boom and their typically diversified product portfolios. As Archer Home Center's Bell explained, "The big guys have a big percentage of our market, but we have a different profile that includes floor coverings, kitchen cabinets, heating and cooling, and brown and white goods, and we service our products ourselves."

In an ironic twist, given Guttman's untimely death, the roster of pre-booked keynote speakers included retired combat pilot and former POW Gerald Coffee, who explored the theme of triumph over adversity based on his seven-year captivity in North Vietnam.