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Sixth Ave. Exits Philly, Returns To A/V Roots

2/07/2011 12:01:00 AM Eastern
SPRINGFIELD, N.J. — Sixth Avenue Electronics has left the Philadelphia market and has dropped several non-A/V categories, including major appliances and gaming, following recent forays into both.

The plan, company executives told TWICE, is to return to the chain’s core A/V and custom-install competencies, abandon its recent promotional positioning, and refocus on its core New York metro area market.

“We learned that it’s not as profitable to expand and be in other categories,” explained operations VP Tom Galanis. “A/V specialty was the winning strategy.”

As part of the retooling, Sixth Avenue last week shut its three Philadelphia-area stores: Montgomeryville, Pa., opened in 2009, and Langhorne, Pa., and Deptford, N.J., which both opened last year. The company owns all three properties, which will likely be leased.

President Mike Temiz said the Philadelphia market proved to be very fragmented, and required advertising in seven separate newspapers to drive business. “We could have made it work in three or four years, but there was not a great upside,” he said.

The city, which had been underserved in CE specialty retail since the demise of Tweeter in 2008, has also become a big-box battleground following recent entries by hhgregg and P.C. Richard & Son.

Sixth Avenue also plans to close a poorly configured store in East Brunswick, N.J., which is also owned by the company, and an older location in Paramus, N.J., whose lease has expired, the executives said. That store was rendered redundant by a newer location on nearby Route 17, a heavily trafficked shopping corridor.

The retailer will continue to operate its Wilmington, Del., location, a former Circuit City site which was that chain’s most productive store, and which has also been outperforming for Sixth Avenue.

The closings will leave the privately held company with 14 “strong, healthy stores” in New Jersey, Delaware and Long Island, Temiz noted. “It’s a defensive move in the current marketplace.”

On the merchandising front, the retailer has also ended its short-lived entry into the major appliance business (“We tried it, and it was costly,” Galanis said), and will similarly drop its PC, gaming and promotionally priced tier-three programs.

Instead, Sixth Avenue will refocus on mid- to highend home theater with an emphasis on IP connectivity, as well as home networking, d-SLRs, and its custom 12-volt, e-commerce and service operations.

The up-market emphasis will be reflected in new, understated advertising that emphasizes performance over price. “We won’t be price driven,” Galanis said, as the company re-sets its sites on New York and New Jersey’s deep upper-income demographic.

Former Best Buy majap merchant Tom Cook, who led Sixth Avenue’s white-goods effort, will continue to oversee small appliances including floor care, which will be sold online only.

Going forward, the company plans to relocate its headquarters and all operations to its central 500,000-square-foot distribution center and office complex, which sits on 27 acres in Somerset, N.J. The former Toys “R” Us facility was acquired by Sixth Avenue two years ago.
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