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MARTA Riding High On Strong Sales

8/27/2002 10:23:00 AM Eastern

Scottsdale, Ariz. - While some national chains have reported slower than normal July and August sales, business for MARTA Cooperative of America members was good during the summer and the buying group is bullish about sales for the balance of the year.

MARTA, which generates $2 billion in electronics/appliance annual retail sales with its 107 members, has 65 percent of volume going to appliances and 35 percent in electronics, and is having a record year. 'In speaking with our members here and during the past few months, many have told me, `This is the best year we've ever had,' ' said executive director Warren Mann.

He said for his group retail sales performance for the year has gone this way: 'The first quarter was `to die for,' the second quarter was okay and the third quarter, so far, is okay. We saw sales coming back during the summer. The air conditioner business has been up, and sales across the board have been up.'

Mann said this has been especially true for several of MARTA's key suppliers. 'Basically we have good programs and we are focusing better than ever before. Our [group] sales with Frigidaire are up 42 percent and Toshiba's sales are up 40 percent so far this year. Thomson is up 50 percent, Whirlpool up 20 percent, JVC is up 8 percent and Fisher-Paykel is up 40 percent, and that's all in the first half.'

Outgoing chairman of MARTA, Elmer Karl, owner of Karl's based in Gregory, S.D., confirmed the strength of the organization in remarks to the group just prior to the show opening. 'I've been in the business 46 years and joined MARTA in the early '80s. With MARTA we've grown our [annual sales] from $3 million to $30 million. If you haven't grown your business with MARTA, you haven't been asking for help or advice from our committees, our executive staff or our vendors.'

Roger Van Vreede, owner of Van Vreede TV & Appliances, Appleton, Wisc., a 36-year veteran of the industry, has been elected to replace Karl as MARTA's chairman.

MARTA's rank and file back its leadership's bullish outlook. Bob McDonald of R.W. McDonald & Sons of Butler, Pa., does a 50/50 split in his business between electronics and appliances. Both have been strong this year and he has some advice for those who are selling HDTVs: 'You have to display HDTV with programming or you can't sell them. That's very important.'

Dan Nahas of A.K. Nahas of Vanport, Pa., who sells more appliances (70 percent) than electronics (30 percent), noted, 'We don't see a lot of problems now. CE sales have been good and we've had a banner air conditioner year. We have not seen soft sales this summer.'

Illustrating the importance to its brands of MARTA and other independent dealers, both Tom Costello, senior VP of retail sales for Philips, and Rick Calacci, senior VP/general manager of Sharp's Consumer Electronics Group, attended the show.

Costello confirmed that national retailers have had their problems recently. 'The bigger players have held too much inventory and there is no question that they are looking close at inventories now.' As for Philips' attendance at the MARTA convention, and the condition of independent retailers in general, Costello noted, 'This [show] is a coming-out party for us to attract more MARTA dealers. MARTA, along with other independents, are interested in plasma, LCD and HDTVs. Independents are not in a [difficult] inventory position, since they don't plan their inventories three to five months in advance.'

Sharp's Calacci said his 'gut reaction' about current market conditions and for the fourth quarter is. 'Retailers we talked to are worried they won't get enough flat panel or LCD [television] product. We are bullish about the end of the year.'

Looking down the road, Calacci said that by 2004 the flat-panel TV business 'will be like the projection TV business of '96 and '97, except with flat panel there will be higher price points.'

Panasonic has seen and expects more growth in both major appliances and color TV this year. Michael Horn, senior product category manager/home appliance, for Panasonic Company Central, reported that in general 'white goods sales have held up this year, with lots of upscale sales.' He added that down the road Panasonic will be doing a lot more in the air conditioner business.

Henry Hauser, product category manager for TV with Panasonic Company West, reported a shift from 'CRT to non-CRT [color TVs] right now. More independents want to buy HDTV and display it. The technology is here now and there is growth. We have been telling them to make a `technology statement' with HDTV and hook them up to DVD players to show the best picture.'

Richard Gedman, Samsung's Western regional sales manager, reported slower sales for some national retailers and regionals during the summer, added, 'There has been plenty of play on LCD, plasma and our Dynaflex color TVs. During the fourth quarter dealers will see us be aggressive with plenty of product moves and heavy advertising.'

Getting back to MARTA's Warren Mann, he noted that 2002 has been for his organization 'the first year of significant share gains for MARTA' versus major chains. 'Only Lowe's has a share gain against us this year.'

When asked how MARTA has been able to keep pace or forge ahead of many national and regional chains, Mann used a military metaphor, 'We operate like guerilla units. There is no Patton or Eisenhower here. We put our troops on the ground and they know the territory and terrain. We are terribly nimble in the marketplace.'

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