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Bose May Add Up To 10 Stores In Its Factory-Outlet Operation

Bose said it might add as many as 10 more factory-outlet stores to its complement of eight stores during the next year.

Bose’s existing stores, outlets for factory-refurbished Bose products, are located in discount malls in what the company called understored rural locations.

Like the first store opened three years ago, new Bose stores will sell nothing but refurbished Bose products, including Lifestyle Music Systems, speakers, and the company’s direct-marketed products: Wave table radios and portable Acoustic Wave Music Systems.

“We’re looking at locations, and if there’s a remote location that makes sense, we’ll open an outlet,” a spokeswoman said. But the company isn’t committed to opening a fixed number of stores in the next 12 months if it can’t find the right locations.

Besides serving as outlets for B stock with full warranties, the factory-owned stores provide an opportunity to test POP material, and sales and demonstration techniques, the spokeswoman said. On average, the stores are about 3,000 square feet in size and carry no other brands.

The stores are typically in discount malls that are home to other factory outlets and are destinations that “guarantee traffic,” she noted. And it’s unlikely Bose would open a freestanding store in a rural area because of expected low traffic.

“Informal research indicates that many people who get a demonstration go home and purchase from our usual distribution,” she added.

Bose is unlikely to open outlets in factory-outlet malls in metro areas — including Secaucus, N.J., just outside New York City — because the company has ample distribution in those areas, she said. Bose could sell its refurbished products through catalogers, “but we’re looking for more than that” from the factory stores.

Bose outlets operate in the following towns: Foley, Ala.; Birch Run, Mich.; Cabazon and Camarillo, Calif.; Grove City, Pa.; Kittery, Maine; Loveland, Colo.; and Osage Beach, Mo.

Extended Warranty Firms Prepare For More Legislation Nationwide

By Lee Buchanan

More warranty legislation is on the way, and third-party administrators are ready for it. During September, Oregon became the 13th state to impose regulations on extended warranties, and other states are expected to follow suit.

The larger third-party administrators say that sensible legislation improves their image. Coping with regulators can be a headache, but most companies say that it is good for business.

Kevin Rupkey, president of Warrantech Consumer Product Services, says he supports sensible legislation.

“The legislation is good for legitimate third-party administrators, retailers and consumers,” he explains. “I welcome it. As regulations become more stringent, it becomes so bureaucratic that retailers are turning more to industry experts, like Warrantech, to manage this process for them.”

“A third-party administrator’s expertise is to create a marketable product for the retailer while providing a needed service to the consumer that is completely insured and safe,” Rupkey concludes.

Eric Kord, executive VP at Delta Warranty, calls warranty legislation “a fact of life. It’s also an opportunity. It certainly separates the reputable companies from the companies that aren’t.”

The National Association of Insurance Commissioners continues to work to develop a model for state regulation.

“If that does pass, you’ll see a great number of insurance commissioners going back to their states to file legislation to regulate warranties,” says Tim Meenan, general counsel of the Service Contract Industry Council.

“In general, we’re supportive of that,” Meenan says. “Increased regulation will benefit the image of the industry.”

The smaller retailer is likely to be the loser when state regulations come to town.

“It’s going to take, in many cases, the self-servicing dealer out of the [extended warranty] business,” says Charles Romano, sales and marketing VP at Video Aid.

“I don’t think it’s going to have an effect on the major third-party administrators. Every one of them has insurance, every one is underwritten,” he states. “The local dealer who has been selling service plans and hasn’t been reserving the proper amount or is underinsured is going to move away from this business.”

Tom O’Hern, national marketing manager at Priority Service, says that “it can be annoying at times, but we certainly have the financial resources and backing to work with any of the legislation.”

Mike Stevenson, president of Federal Warranty, says he is generally pleased with the regulations that states have enacted. “We have taken an active role in trying to help move sensible legislation, favorable to both consumers and the businesses themselves,” he says. “That has happened in most legislation.”

“Legislation is good for

legitimate third-party

administrators, retailers and consumers. I welcome it.”

— Kevin Rupkey,