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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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