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Sixth Ave. Retooling Biz, Closing Five Stores

2/01/2011 05:12:45 PM Eastern

Springfield, N.J. -
Sixth Avenue Electronics is returning to its core A/V specialty and New York
metro area roots after testing new categories and entering new markets.

"We learned that
it's not as profitable to expand and be in other categories," operations VP Tom
Galanis told TWICE. "A/V specialty was the winning strategy."

As part of the
reevaluation, Sixth Avenue last night closed its three Philadelphia-area stores:
Montgomeryville, Pa., opened in 2009, and Langhorne, Pa., and Deptford, N.J.,
which both opened last year.

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.

Sixth Avenue owns
all three properties, which will likely be leased.

The retailer 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 store had been rendered redundant by a newer Sixth Avenue location on nearby
Route 17, the executives said.

The company 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
performing strongly for Sixth Avenue.

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

The company 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 high-end home theater, with an emphasis on IP
connectivity, home networking, d-SLRs, and its custom 12-volt and e-commerce
operations.

"We won't be price
driven," Galanis said.

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 two years
ago by Sixth Avenue.