Lyndhurst, N.J. — Harvey Electronics reported sharply lower sales and earnings for its first fiscal quarter that, the company said, do not yet reflect the impact of new initiatives set in motion by the chain’s new management team.
Total sales for the three months, ended Jan. 27, fell 26.1 percent to $8.4 million, and comp-store sales declined at the same rate. Harvey also reported a net loss of $1.0 million for the period, compared with net income of $45,000 for the year-ago period.
Interim CEO Martin McClanan said a host of aggressive strategic initiatives, backed by a $4 million equity infusion, should reinvigorate sales and return the struggling A/V specialty chain to profitability, although the programs would take time to mature.
Harvey said its game plan calls for “expanding upon its leadership brand position” and growing its custom installation and emerging technology businesses. To that end, the company is:
developing new advertising and marketing programs;
revamping its in-store merchandising in advance of showroom enhancements;
overhauling its Web site to help drive sales leads; and
holding in-store launch events for new products and emerging technologies.
“Although the turnaround at Harvey is still in its very early stages,” McClanan said, “in recent weeks we have seen improvements in average order value, and an increase in qualified sales leads, many driven through Internet keyword marketing. These are key indicators that our consultative selling model is on the right track.”
Added chairman Andrew Stackpole, “As an investor in Harvey, and as chairman, I share your disappointment with the results of the first quarter. But against this disappointment I am confident we are doing what it takes both to address the challenges Harvey is facing while investing in our opportunities. In this regard, the company is aggressively pursuing a strategy to return the company to growth and profitability as rapidly as possible. I am heartened by the progress to date, and remain convinced that we have the right brand, extraordinary products, and some of the best people in the marketplace to take advantage of the custom installation opportunity in the New York metro area and beyond.”