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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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