By Lisa Johnston
New products on display at the American International Toy Fair, held in N
A wave of new store openings and explosive sales of digital TVs and laundry products will propel the NATM Buying Corp. past the $4 billion volume mark this year, group officials said here during the organization's annual March meeting.
Bill Trawick, president and executive director of the 12-member white- and brown-goods buying group, said NATM sales soared $400 million, to $3.6 billion, during its current CE fiscal year, which ends this month, and will likely grow by another $550 million over the next 12 months.
Driving the gains were a 65 percent spike in units sales of digital TVs and a 10 percent increase in majap unit volume. What's more, dollar volume for white goods grew at twice the pace of unit sales, reflecting a brisk business in premium appliances.
“It was another phenomenal year,” Trawick said.
The good times will continue to roll in 2006, he said, thanks to continuing consumer demand and storefront build-outs by each of its powerhouse regional dealers. These include:
a new Cowboy Maloney outlet store, which opened last month in Biloxi, Miss.;
two new Grants locations, expected to open shortly in the Chicago area market, which will bring its store count to 10;
a major expansion of Nebraska Furniture Mart's CE and majap department at its flagship facility in Omaha, Neb., set for completion next year;
two new Queen City stores, taking the roster up to 16 locations this year;
a store relocation for ABC Warehouse;
Boscov's recent acquisition of 10 former Macy's locations;
the start of construction on BrandsMart U.S.A.'s third Atlanta superstore; and
two new R.C. Willey units, including last month's Reno, Nev., opening, and the company's first California store, located in Sacramento, that's set to open in June.
On the CE side, Trawick said the group will likely maintain its current lineup of core video vendors, consisting of Samsung, Sharp and Toshiba, and would consider adding LG to the short list due to its growing role with individual members.
Product-wise, sales of analog TVs continue to decline as new technologies supplant them, Trawick said. Nevertheless, “There's still a lot of analog business out there,” he observed. “I wish we could buy more. Consumers still see value in it, and the nationals are getting out.”
On the DTV side, NATM's direct-view business saw the greatest growth over the prior 12 months with a 175 percent spike in unit volume. Following tube sets was plasma, up 125 percent; flat-panel LCD, up 90 percent; and projection TV, trailing with a 10 percent gain.
On the flat panel supply front, Trawick said he feels confident that NATM dealers will receive their fair share of displays this year, and is backing that up by asking for commitments from core vendors. He said NATM dealers fared better in that area than others last year due to steady supplies from suppliers Samsung and, to a smaller extent, Hitachi and LG.
In other NATM news, the group is considering bringing on a 13th member, who would be joining from another buying organization. The action follows a |recent vote by NATM's board against admitting two applicants. According to Trawick, the screening process includes a careful consideration of a retailer's business plan, growth strategy, product mix, assortment and geography.
Elsewhere, NATM members Cowboy Maloney and Conn's reported brisk replacement and whole kitchen package sales six months after Hurricanes Katrina and Rita slammed their Gulf Coast trading areas. Executive VP Johnny Maloney said reconstruction efforts will ultimately make for “a bigger, better Gulf Coast,” although a more immediate problem is finding staffers. “There's a lot of competition for employees,” he said, noting that FEMA and even Burger King are offering very attractive wages to local workers.
The NATM meeting, held last week at the Westin Diplomat Resort, marked the group's last annual conclave in March. The group decided to move the meetings to September to avoid future conflicts with Sony's line shows and with CE suppliers who close out their books on the fiscal year. The change also represents one less buying group event for vendors, who “are killing themselves with all these meetings,” Trawick said.
Going forward, NATM will continue to hold its directors' meeting in January during International CES, and will meet with core suppliers next March. But the next annual group meeting will not be held until Fall 2007, when members and vendors convene at the Gaylord Texan Resort in Dallas from Sept. 26-29.
NATM coverage continues in the Major Appliances section, p. 74.
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