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HES Expands Its Tier-One TV Program

Home Entertainment Source (HES), the specialty A/V division of the $10 billion-plus Brand Source buying organization, has added Toshiba to its vendor ranks and has expanded its programs with Panasonic, Pioneer, Samsung and Sony.

The announcements were made by HES executive VP Jim Ristow during the 500-dealer group’s annual Spring Summit and buy fair, held here last week at the Hilton Anatole.

Toshiba, a longtime supplier of sister group MARTA Cooperative of America, has also joined Expert Warehouse, HES’ inventory distribution program.

Ristow also announced expanded programs with current vendors Sony, Panasonic, LG and Samsung. Sony will now supply the $1.4 billion group with products from its CS&A custom installation line, while LG is providing its high-end Opus LCD TV line. Ristow said that HES has also forged “a deeper relationship” with Panasonic, which will now offer the group better pricing and access to all of its models, including the top-of-the-line 750 and 850 series of 1080p plasma TVs.

All of the product additions will also be available to HES members through the Expert Warehouse distribution program, which allows smaller accounts to participate in vendor-direct programs with otherwise prohibitively high order requirements.

Also new through Expert Warehouse is a hybrid program with Samsung that provides qualified dealers with the advantages of a direct-sell relationship — including volume rebates, merchandising support, longer price protection and a better display program — albeit with a smaller commitment to buy.

In addition, manufacturers supplying Brand Source’s newly relaunched 12-volt division, Mobile Entertainment Source, will be joining the warehouse program in April.

Also joining the HES supplier set is Escient, the digital media management unit of D&M Holdings. It too will be distributed through Expert Warehouse, which enjoyed a 35 percent spike in sales during the first two months of the year, and was shipping 10,000 flat-panel TVs per month during the fourth quarter of 2007. Ristow attributed the gains to consolidated purchasing through the warehouse program, which now boasts a “formidable line card,” and to higher member sales, which were up 16 percent last year.

HES also represents “the only alternative to big-box stores for high-end CE,” he told attendees, and is better positioned to succeed in the marketplace than any other retail entity. His advice to members amid the challenging macroeconomic environment was to focus on solutions and innovation rather than remain mired in old ways of doing business. His counsel was seconded by HES president Stuart Schuster of Marvin Electronics, who told fellow dealers to “be flexible. Don’t get stuck on one brand or model because it may not be available when you need it.”

Indeed, dramatic changes in the video category should compel dealers to reevalute their vendor matrix, Ristow said, as tier-one manufacturers outsource opening price point production to China to displace second- and third-tier suppliers, and midprice brands extend their reach into the super-premium market. To help members set their TV strategies, HES has charted the complex price tier and margin shifts taking place within the industry.

Ristow added that “the vast majority” of HES dealers will be participating in the National Telecommunications and Information Administration’s DTV set-top box coupon program, and that the group has stockpiled “thousands” of Zenith and off-brand Micro GEM converter boxes in anticipation of the analog cutoff.

In other news, this year’s HES award winners included Integra, which received the New Vendor Award; Chief and Spirit, which shared the Team Spirit Award; and Samsung, which copped Most Valuable Player honors.

In addition, Vance Pflanz of Pflanz Electronics was named Member of the Year; and former multiterm HES president Bob Cole of World Wide Stereo and regional rep Sherry Dantonio received recognition for their service to the group.

Attendance at the HES Summit was up 75 percent over the prior year, Ristow noted, and exhibitor space increased 40 percent. All told, more than 3,500 Brand Source members and suppliers attended the four-day confab, which carried the theme “Mission Possible: Success.” Ristow said the groundwork being done now by the buying group and its members will help them “reap rewards when the economy comes back.”