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Putting Sixth Ave. In Perspective

6/15/2011 02:17:00 PM

It was disappointing to see so many bitter comments from Sixth Avenue employees in recent days.

When the company started in the ’80s I was with an audio company that refused to even consider opening them as a dealer. In those days, audio was a hot product and consumers approached music with the fervor today reserved for video games and tablets.

New York had plenty of capable audio retailers, such as Harvey’s, Tech Hi-Fi, Atlantis, Stereo Warehouse, plus dozens more. Layered on top of the specialists were more broad-based retailers — Trader Horn, Circuit City, Newmark & Lewis, Tops, Crazy Eddie, even Macy’s, which also sold audio products.

Sixth Avenue jumped into this congested cauldron, mostly by transshipping in premium brands because picky ones like ours would not sell them directly.

Despite our initial misgivings, the company flourished. They had capable sales personnel and access to great lines like Luxman, Harman-Kardon and others.  Sixth Avenue opened up in Paramus, N.J., with great success, blithely taking the often fatal step of crossing the Hudson River. (Rumor has it they did not know about Paramus Blue Laws — no Sunday sales.  Imagine being a New Yorker and learning your store had to be closed on your biggest sales day!) They then showed originality with their Route 22 store that looked like a Brooklyn street.

For the next quarter century the company continued to expand and adapt.

Their original business plan a quarter century ago probably assumed 25 percent to 30 percent profit margin on much of their product sales, with more than 50 percent on loudspeakers and accessories.

Compare with today’s climate:

  • Many of their original competitorswent out of business;
  • The audio business with its hi-fi roots disappeared, replaced with iTunes and low-fi MP3.
  • Entire new technologies arose to supersede the NTSC CRT televisions, phono cartridges and cassette decks — allstaples on their selling floor at one time, replaced byflat-panel HDTV, computers or communications devices.

·         Margins shrank to single digits on the bulk of their product offerings.

Through all this revolutionary transformation, Sixth Avenue kept adapting, kept growing and kept a large number of people employed. At the same time, New York-area residents got tremendous value in their electronics purchases. So if the company has finally encountered some difficulties – well, maybe it’s about time.

If they apply the adaptability and resilience historically exhibited, there’s a good chance Sixth Avenue will be around for another quarter century.

Warren Mann is a longtime CE industry veteran who has worked on the manufacturing side and with major retail buying groups.

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