Industry Approves Moves

NEW YORK — Industry reaction to Tweeter's store cloings was supportive. Jay Vandenbree, president Sony Electronics Consumer Sales Company, told TWICE that "We support the management of Tweeter both in terms of getting [expenses] in line, while focusing on a higher level of service through training initiatives in the stores. Consumers need as much knowledge around CE as possible, and Tweeter has always tried to provide that at a high level."

"Mitsubishi believes in the A/V specialty channel," said Max Wasinger, Mitsubishi sales and marketing senior VP. "We are sorry to hear that Tweeter is closing 49 stores, but if this is what they need to do to be a strong player to get healthy in the future, we endorse and support their decision and look forward to working with a new Tweeter as they reorganize and focus on their core competency and the markets where they are strong."

Bob Weissburg, president of D&M Sales & Marketing, North America, said he is "glad they are taking action in trying to make changes in how they run their operation. They seem to be doing things in their shareholders' best interest. The biggest challenge for retailers is that they can't continue to operate the same way anymore. They have to merchandise better, control costs more and do other things better. Retailers have to evolve as their customers' needs and wants change too."

Dave Workman, executive director of the PRO Group buying organization, said that despite the consolidation, Tweeter remains its largest member dealer.

"The industry wants to see a healthy and profitable Tweeter regardless of its size," he said. "The industry needs a Tweeter and specialty retailers at the front edge to break exciting new technologies."

Workman added that he doesn't foresee the restructuring having a negative impact on PRO Group's programs with its vendors.

Other vendors seemingly took the announcement in stride. "From our perspective," said OmniMount's executive VP Geoff Miller, "It's business as usual. Maybe some time ago the closing of stores would be alarming. Today it's a good thing [overall] because it means they're looking at their costs."

Hal Moulton, VP sales for car stereo supplier JL Audio, said "We knew there were some dead-weight stores. I'm glad they are getting rid of the dead weight. Their stock is up so I think the stock market is thinking the same thing."

Overall, Moulton is "pretty positive" about Tweeter's prospects. "We're not really concerned with the health of Tweeter. The new playground stores are really nice. Absolutely, they will be able to reposition themselves. They have the right people."

Sandy Gross, president of Directed Electronics-owned Definitive Technology, said "It seems they are making a valiant effort to get overhead costs under control and restructure the concepts of the stores," but he noted that the chain faces a "betwixt and between" conundrum.

Tweeter, he continued, is not "small and entrepreneurial enough to be a true specialty store and not big enough to have the traffic and market presence of big-box retailers."

Tweeter's woes do not reflect the end of the specialty-store era, Gross emphasized. The issue for Tweeter, he said, is "Do they have the right footprint in the marketplace and the right overhead structure to function successfully as the custom installer they envision for themselves?"