During bleak times like this it’s easy to just look at the steady drumbeat of bad economic news and say there are no opportunities out there.
There is no question that just about everyone, even in this vibrant industry, is hurting. The Chapter 11 bankruptcy filing of Ritz Camera, just days before the PMA Show, was just the most recent item of bad news and a surprise to everyone. And the latest financial reports from some publicly held retailers are lousy at best. In a time where even Warren Buffett said he has made some bad investments, there are rays of sunshine, at least in this industry, if you look closely.
Sixth Avenue Electronics is entering the Philadelphia market with four stores that are going to be managed by former Tweeter personnel. And it is planning to open stores in Connecticut.
Before you recite the litany of regional CE retailers dying due to overexpansion over the years, consider that Sixth Avenue told TWICE that it was planning this for more than a year, so this wasn’t an overnight decision.
In the more specialized cellular phone field, Wireless Zone, a 309-store wireless-retail franchisor that sells Verizon phones exclusively, projected a $39 million gain in revenues to $240 million in 2009. (See p. 30.) Its plan is to aggressively expand into new geographic markets, rolling out a new interactive store design and launch a bunch of branding initiatives.
Sales gains, aggressive expansion, new store designs and branding initiatives … you wouldn’t think it was 2009 the way Wireless Zone’s plans sound.
And back to traditional electronics/appliance retailing, hhgregg reported net sales and earnings gains for its third quarter that ended Dec. 31.
While it wasn’t impervious to bleak major appliance sales, hhgregg aggressively pursued Circuit City’s market share in a variety of categories as the former national retailer underwent liquidation sales and even accepted the chain’s gift cards.
In its financial statement, the chain said it has a “strong liquidity position” which should help during troubled times.
Jerry Throgmartin, who was recently named executive chairman of the chain, said that landlords are more flexible on lease terms and rents have dropped due to retail bankruptcies, which could provide expansion opportunities for hhgregg.
Now, one could make the argument that these items are the rare exceptions. Maybe, but one thing Sixth Avenue, Wireless Zone and hhgregg have in common: They were financially healthy before the bottom fell out of the economy. They are now in position to take advantage of their relative health and add sales, profits and market share.
If you look around there are probably more companies — retailers, manufacturers and distributors — that are healthy enough to push their advantages in this economy. Take a close look. Maybe one of them is yours.