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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.
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