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More Diverse PRO Group Expects Sales Growth

5/17/2010 12:01:00 AM Eastern

SCOTTSDALE, ARIZ. —
The Progressive Retailers
Organization’s (PRO Group)
annual spring meeting, held
here earlier this month, illustrated
its new diversity and
expected sales growth.
The meeting was decidedly
more upbeat than in the
past three years, with PRO
members and suppliers prepared
for growth, seeing a
gradual upbeat turn in the
economy and experiencing
glimmers of pent-up consumer
demand.

PRO is now more diverse in its membership
than ever before, due in part to
the dramatic economic changes of the
past three years that have altered the
specialty A/V retailing channel.
Among the changes to PRO over the
last three years:

• PRO’S alliance with BrandSource’s
Home Entertainment Source (HES) in
2008 enables the latter to share with the
former its distribution advantages and
lets both collaborate with mutual vendor
partners on specific channel strategies.

• PRO has lost over the past three
years Tweeter and MyerEmco, which exited
the business, while Anderson’s and
Abt left the group in the past year. Flanner’s
just ceased operations days before
the show.

• But World Wide Stereo, Paul’s TV,
The Big Screen Store and Bill Smith, Inc.
have joined PRO, giving it one less member
than last year — 17.

• PRO’s executive director Dave Workman
predicted the group’s sales will be $2
billion this year, a $200 million gain over
last year’s $1.8 billion prediction, due to a
slowly improving market and expansion
by such members as Sixth Avenue Electronics,
Paul’s TV and others.

Workman described business to
TWICE during his group’s annual event
this month as “choppy” — a favorite adjective
used by many at the event and in
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.”

While its membership
has changed in 12
months, Workman said
the new recruits 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.”

Also attending the meeting was Jim
Ristow, executive director of HES, and
when asked about former BrandSource
members Wide World Stereo and Big
Screen Store joining PRO, he noted,
“We are looking for an industry solution.
[HES and PRO] want to partner with
the right vendors, place the right members
with the right groups. We want partnerships
… we are looking for the betterment
of the industry.”

Workman noted PRO’s new members,
such as appliance/electronics retailer
Bill Smith Inc., which is more majaps (for
now) in its mix than CE.

“The foundation of alliance is the
same and has been since the beginning,”
Workman said, “to position [HES]
and our group as a larger block of business
to the industry. It is about line mix,
technology and expertise … more than
what a big box can offer.”

Ristow added that the HES/PRO alliance
is designed to “continue to carry
a channel message. We just came from
Asia and discussed the advantages of
doing business with our retailers. We
are building relationships with the right
suppliers for the right types of products.
We are doing a lot of messaging to the
vendor community to continue their support.
This is an evolution and has been
beneficial” to both groups.

Ristow acknowledged the upbeat,
mood at the PRO meeting given the dismal
economic and market conditions of
the past couple of years, and maintained,
“We believe that we are in the midst of a
continuing consolidation. Those that are
left will dominate ... and [HES and PRO]
intend to be around.”

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