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A Diverse PRO Group Expects Sales Growth

5/05/2010 09:14:28 AM Eastern

Scottsdale, Ariz. - A more diverse Progressive Retailers Organization (PRO
Group) is holding its annual meeting here this week, with suppliers prepared
for growth as the economy has begun to turn.

George Manlove

The buying
group of mostly specialty A/V retailers has undergone a transition since its
meeting last May, now with 17 members - one less than a year ago - and expected
annual sales of $2 billion, $200 million more than last year, due to a slowly
improving market and expansion by such members as Sixth Avenue Electronics,
Paul's TV and others.

Dave
Workman, executive director of PRO, still described business as "choppy" -- a
favorite adjective used by the industry this year. "Business has been up and
down. Trying to match last year's [sales in dollars] for flat screen in the
first quarter has been tough because you have to sell more units. But home
audio has been a bright spot."

And its
membership has changed in 12 months. Anderson's, MyerEmco and Abt are gone,
along with Flanner's, which
ceased operations earlier this week
.

But new
members have come on board in the interim, namely Paul's TV, World Wide Stereo
and Bill Smith Inc., which is more of an appliance/electronics operation.

For more on the PRO Group
check out Steve Smith's Blog.

When asked
what the new members bring to PRO, Workman said, "They are varied companies ...
but there are commonalities in their businesses with us. World Wide Stereo is
very respected in the business. Bill Smith joined us because it wanted to
improve its electronics business. They do more appliances than electronics."

He added,
"The new members bring something a little different. You can't have 17 members
that all have the same [business] model and all act the same. Buying groups
work if there is a common interest and there is some diversity. You don't want
one mindset."

One common
mindset, at least of Workman, Vann's George Manlove, and ListenUp's Walt
Stinson, who also sat down with TWICE Tuesday evening, is not getting the
chance to introduce 3D TV.

"We
believe that specialty retailers have always been best suited to introduce new
technology," Manlove said, "and some manufacturers are questioning the long-term
decision of having big boxes introduce it. If they had to do it over again,
they'd probably ask for a mulligan because the experience on the sales floors
has been unacceptable since they can't explain the technology."

Stinson
pointed out, "Manufacturers knew [specialists] could introduce this type of
technology, but they lost that knowledge. With all the changes and turmoil in
their companies, their institutional memory isn't what it used to be."

The good
news for PRO is that its members are "starting to get some decent supplies,
from Samsung and Panasonic."

Workman
stressed that 3D TV is "a marathon that has to be focused on for the long haul,
for next year and the years after. It isn't about immediate numbers. [At
retail] you have to do your blocking and tackling."

He noted
that while consumers know 3D from the movie theater, "They don't understand the
nuances of the home experience, about audio quality, using HDMI 1.4, the types
of glasses to be used, why the image may be blurry at times ... there are so many
questions -- questions that cater to a specialist's expertise."

Workman
added, "The worst thing for everyone would be a bad buzz in the market based on
a bad retail experience."

The issue
of being bypassed in 3D TV led to the Workman to the key issue of support -- or
lack of same -- of specialty retailers by major brands.

Workman
said it was "premature to discuss brand realignments" by PRO but there have
been discussions about the "pecking order of support. We have been vocal about
channel strategies with our suppliers and want to hear more than just words."

He noted,
"There has been movement by a number of manufacturers, sincere and positive
movement with plans and not just words [to support specialists]. This is a
departure."

Workman
said his group realizes that when shortages occur, which has happened in the
first quarter, "The biggest retailers will get preference in this business.
What we are looking for is manufacturers to create more balance is distributing
product."

(For
more on the PRO Group meeting, visit www.TWICE.com.)

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