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HES Marks 10 Years, Emphasizes Market Strengths

Home Entertainment Source, the A/V specialty division of Brand Source, celebrated its 10th anniversary at International CES, here, by highlighting its larger market influence after a booming 2005 and its strategic alliance with the MARTA buying group.

Executive director Jim Ristow said HES sales for 2005 were up 27 percent “vs. the industry’s 8 percent gain,” and its sales were $900 million. Ristow noted that when including the CE sales of its new strategic partner MARTA, “Our sales are now $1.2 billion in consumer electronics.”

Ristow compared the $1.2 billion sales number to CE sales of other industry buying groups such as PRO, HTSA and Nationwide and said, “We are now the big guy on the block.” HES said it has 428 members and well over 600 storefronts. Those sales numbers are significant when considering that five years ago HES sales were $250 million annually.

The MARTA deal brings 93 members to parent organization Brand Source and combined electronics/appliance sales of $1 billion. Significantly “40 percent of those sales are CE, which is a lot for electronics/appliance stores. And many of their members are large independents,” Ristow noted.

Bob Cole, president of HES and Bob & Ron’s World Wide Stereo of Hatfield, Pa., said about HES’ strengthened status: “We are not a buying group, but a selling group. We are a big-time business now that stands second to no one.”

Cole noted, as well as Ristow, that HES’ market power even before the MARTA deal makes its members’ “buying situation as good as or better than any other.”

At a supplier meeting in Atlanta two months ago Ristow said that HES “showed suppliers all of our number, just what our board sees. We were an open book.” The offshoot of that meeting has been a variety of deals to “help promote in the most effective way their products through our members’ operations.

Ristow also announced Expert Warehouse CI, an offshoot of its Expert Warehouse system for HES and Brand Source members, which is for its members that offer custom installation. “We are testing it now, and it should be fully operation by the end of March. Almost 95 percent of the country would be able to get overnight deliveries of cable, wires, tools, faceplates, accessories and the like, or by picking up such items at 95 local branches.” The operation, like its successful Expert Warehouse operation, has a separate profit and loss and a separate operation with HES members on its board and is being backed by distributor ADI.

With Expert Warehouse CI, like Expert Warehouse, the organization is owned by HES and its members, Ristow explained. “Those of you who are not part of Expert Warehouse, you must know it is a true company, with its own profit and loss and its own management. Since HES is a non-profit organization, when it makes a profit you do too,” based on a variety of financial factors, he said.

In other HES news, in the next couple of months the group will launch, a consumer site that will refer consumers to members’ stores, info on products and the like. Ristow was pleased to announce that this month “Mitsubishi will be shipping product to HES through Expert Warehouse, which is the only warehouse operation that its main brand is using.” Mitsubishi typically ships direct, he said. “The Mitsubishi brand will be available to ever Brand Source member, including its 1,080p products.”

In addition, HES is interviewing several candidates to replace membership manager Jeanette Howe (see story, above).