By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Many mobile electronics retailers say that September sales prior to the Sept. 11 terrorist attacks were brisk, leading some to view the fourth quarter with cautious optimism.
Almost three-fourths of the retailers contacted by TWICE said sales for September were down, with most seeing decreases of 10 to 15 percent below last year. But many said sales were strong during the first week of the month and two retailers reported significant gains for the entire month.
At Car Toys in Tulsa, Okla., manager Jeff Sanders said, "August was outstanding and the first week of September was going like gangbusters. We were really on the road to a great month. Based on the first week of sales I would have had a better September than last year but, as it was, September was down 15 percent. We're waiting to see on the fourth quarter."
At Live Wires, Fairfield, Conn., "Sales were actually moving along at a good pace [before Sept. 11] according to owner Ed Zurhellan.
Tom Sweere, general manager of Beach Auto Sound, Huntington Beach, Calif., said September "was pretty solid other than the one week. If it weren't for that week, we would have been flat." Cartunes of Stillwater, Okla., also reported that sales were strong in early September, prior to the attacks.
Surprisingly, Myer Emco, Gaithersburg, Md., and Brands Mart, Kansas City, Mo., saw very strong gains for the month. September "was one of the best months ever in car audio," according to Myer Emco's car stereo division manager Brad Henderson. "One store was 207 percent above quota, one 147 percent of quota and one store that had a huge quota was at 115 percent. It's been the best month all year, I wish I could tell you why. August was a little up, but nothing crazy." Myer Emco closed all stores on Sept. 11 and Henderson said that week was slow, however the rest of the month was unusually strong. "We had a such a good month we had to push a lot of jobs into October, and shipments were screwed up because of the attacks, so I also expect a strong October."
Brands Mart buyer John Brumbaugh said, "We had a very strong August and the attacks had no effect on car audio through September. And so far October is up. September was a great month and we were up by double digits. Being in the Midwest, a lot of our problems last year was with the weather. We had cold and snow for weeks on end and it started before Christmas. Last year, at this time our sales were already slowing down but there's a lot of positive signs this year. Whether it will flow into the fourth quarter, I don't know."
But most retailers are approaching the fourth quarter with caution.
Cartunes has reduced some of its staff. "We are playing it very cautious," said co-owner Lance Munson, on the fourth quarter. "With all this going on and now with the bombing in Afghanistan, we are hoping at least to break even. We used to advertise but we are not doing any advertising. "
Muson also noted that while his business in larger installations is back to normal, he's not seeing the same store traffic. "We're not getting as many walk-ins. We're still doing the big systems but the quick jobs — a head unit and four speakers, or a speaker replacement — have dropped substantially and that's our bread and butter. I can do 20 in a day and at the end of the day, I know I've made a profit."
Some retailers said they are running big discounts and that suppliers are more aggressively discounting as well. Speaking on the fourth quarter, Zurhellan of Live Wires said, "Its touchy. Hopefully it will be good. A lot of manufacturers have dropped their [prices] on a lot of merchandise. Usually maybe once a quarter you get specials — a $5 sales price allowance — but now its once a month. The business climate is a little slow and suppliers have warehouses with a lot of inventory."
Most retailers said they are not changing promotions or advertising as a result of the attacks and many are still hoping to end the year flat or slightly down from 2000.
Many agreed with Charlie Weisel, president of The Specialists in Tucson, Ariz. Despite a flat August and a slow September he said, "I still have a positive outlook, we've already seen some momentum starting to build and expect to be flat or slightly down for the year. I think we'll get get over the glitch and we'll be okay."
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.