San Antonio, Tex. – Abt Electronics and the NATM Buying Group have parted ways, according to the retail organization’s president/executive director Bill Trawick.
NATM decided to accept the resignation of Abt because the Chicago-based retailer could not support a switch in a core group program from Mitsubishi to Hitachi.
Trawick said at NATM’s annual meeting, held here at the Westin La Cantera resort last week that Abt’s decision stemmed from a meeting in January where NATM asked for a core commitment on the new brand, which he didn’t identify. He suggested, however, that the group changed vendors in response to margin declines on Mitsubishi products following the brand’s placement with Best Buy.
‘In January, Abt and three other members that do not carry that brand, agreed to the commitment,’ he said. But just before last week’s annual meeting, Abt contacted NATM to say that upon review, the chain could not back the commitment.
‘[NATM] is not here to dictate to members on how to run their businesses,’ Trawick said, ‘but when you join a group like NATM there are responsibilities. With the advantages [of membership] there are also obligations. What happens if we have another decision down the road like this with another member? It would break down the fiber of the group.’
He noted that while NATM ‘wished it didn’t have to come to this and we wish Abt all the best,’ it was in the interest of both parties to ‘accept [Abt’s] resignation.’
Abt VP Ricky Abt confirmed that the point of contention was a commitment to Hitachi. ‘We haven’t carried Hitachi for a long time,’ he said. ‘We’re super happy with Mitsubishi and we’re doing great with them. It’s a high-end brand and we like high-end brands.’
Abt president Mike Abt wished his former colleagues well. ‘I love NATM, they’re great guys, and the group is as strong as it’s ever been. But sometimes you’ve got to act on your own and do what’s best for your company. And in this case we did what’s best for the company.’
Abt is the fourth member of NATM to leave the group within the last seven months, the three others being H.H. Gregg, American TV and Sight ‘N Sound. In recent weeks Queen City TV and Video Only have returned to NATM after a two-year hiatus.
NATM dealers said they respected Abt’s decision, and that its departure has left the remaining members more solidly aligned behind the group’s programmed buying plans. ‘The group is more together and more committed to working together,’ said Nebraska Furniture Mart CEO Irv Blumkin. ‘We’re all on the same page.’
‘You’ve got to respect their right to leave,’ said J. Con Maloney, CEO of Cowboy Maloney’s. ‘But we can take care of ourselves. None of us like to see people leave, but it’s given us a strong resolve to support each other and our programs.’
Maloney upheld NATM’s programmed buying, which was a point of contention for Abt. ‘It’s a misconception that [programs] force you to take a lot of goods,’ Maloney continued. ‘You pick what you want, but then you have a commitment. Rather than being a negative it’s a positive, because it makes you work harder. And manufacturers have got to respect someone that does what he says he will do.’
Added Scott Hymas, CEO of R.C. Willey, ‘The days of cafeteria style merchandising are gone. We have to find schemes that are going to be successful. We’re all committed to hitting our commitments to vendors, and the group has never been more unified.’
Trawick concurred, noting that ‘we are more unified than we have ever been before. In the past we might have had 50 percent of our members supporting core programs. Now we have 100 percent of members backing those programs.’
Admitting that NATM ‘is not as big as it used to be,’ Trawick said the organization hopes to replace the sales volume of Abt, H.H. Gregg and other departed members with the expansion of existing members. New stores from such as Conn’s, R.C. Willey, Nebraska Furniture Mart and ABC Warehouse, as well as new members Queen City TV and Video Only, should help build sales volume.
NATM is also actively recruiting new members, and as Trawick explained, the organization will be looking closely at that issue right after last week’s meeting. However, he stressed, ‘New members must be committed to supporting core programs, and they must have a plan in place for future growth.’