PRO Group Expects Expansion From Existing Members In 2005

SCOTTSDALE, ARIZ. — While the PRO Group does not have a strict plan to replace Ultimate Electronics' sales volume, the organization expects growth by current members and continues low-key discussions with potential candidates.

Roger Heuberger, president/CEO of PRO, said flat out, “We don't have an action plan to replace Ultimate's [sales] volume.” He said that last year when Ultimate rejoined PRO, “18 was the largest number of members we ever had,” and that recruitment is usually “low key” with “selective conversations going on at all times.”

Heuberger does not rule out the “new” Ultimate rejoining the group at some point. (See story p. 1.)

While there may not be any imminent news on getting new members, individual members are expanding, Heuberger reported. “Electronic Expo is expanding. Flanner's is starting a growth plan by this fall to upsize its store and relocate it. Ken Crane's opened one store and they will be opening more. Myer-Emco [is] to open another store in the near future. OneCall is expanding its retail store in the Spokane market. Tweeter is fine-tuning its format, and 6th Avenue Electronics continues to grow.”

George Manlove, president/CEO of Vann's and PRO's chairman, said that his Montana-based operation is building two new stores and is “putting a lot of resources” in its Web site, since business has expanded online.

“What is more important now due to the industry changing so rapidly is that we are trying to shore up our businesses, to try to solidify our relationships with our key vendor partners so we are all are on the same page,” Manlove noted.

As important as expansion is “taking care of our customers,” Heuberger noted. “The problems of some retailers have been the ability to service your customers at the level you should when your management is stressing growth. You must maintain your standards.”

Manlove added, “We can't dilute the value proposition in which this group is built on. We have to provide added-value products and service to our customers and be a conduit for mid- to high-end goods that consumers bring to market. All of our business operations need to reflect that.

And Heuberger stated, “We have to continue to have a healthy balance between the number of store fronts and productivity per store front. A typical PRO Group store does $5 million a storefront on average. Not a lot of retailers do that. Entire buying groups may have only a handful of chains that do that. When you have that kind of activity going you have high productivity.”