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HES Members Upbeat On Q4 Sales, Profitability

LAS VEGAS – BrandSource is upbeat about its prospects in CE for the upcoming fourth quarter and holiday season, as it sees industry trends breaking its way.

In an interview with TWICE during last week’s annual Las Vegas BrandSource convention, Jim Ristow, executive VP of the group’s Home Entertainment Source (HES) division, noted, “This show focuses on TV and appliance dealers and rent-to- own members. In this channel CE has done very well.”

In audio, “There is transition to wireless audio world, like ‘The Jetsons’ lifestyle at affordable price points. Electronics/appliance dealers can sell and install such products” without having sophisticated installations.

When asked about profitability in CE and in TVs, Ristow said, “For our channel UPP and MAP [changes] made earlier this year have provided … a significant amount of benefits for our members.”

He said his members have a “more profitable picture” in CE than the past, and that for the fourth quarter, vendors “are in the middle of fine-tuning their policies. We will see some changes before Q4.”

Ristow said that vendors are “looking to add SKUs” to existing UPP and MAP programs, which in some cases will allow “packages and promotions of products within those programs.”

Specifically in TVs, Ristow said, “With HES we have always dominated with larger screen sizes. What has changed is that we have moved to price points that we can do higher volume [and profits]. It is our largest growth category.”

For instance, he commented that Sharp is “a valued partner, and has grown significantly [this year] as a big player in the 60- to 90-inch screen sized TVs.”

Smart TVs, Ristow said for HES members, “continues to grow and has become a larger share of our members’ business and accepted by our customers. We pushed it early and our member’s adoption rate has become very high.”

On the state of the marketplace, Ristow remarked, “Consolidation is happening with vendors and retailers,” and that having “strong and solid partners is more important than ever.”

Ristow echoed remarks by Brand- Source CEO Bob Lawrence that a diminished Best Buy, or worse, would be bad for independents.

Regarding Amazon and the online tax issue and its effects on the market, Ristow said, “That would level the playing field for our members. Those that buy online just for that [tax] advantage could turn to us.”

One category that spans the gap between CE and toys is radio-controlled cars. For fun at the show, convention attendees were able to drag race against champion John Force with Traxxas remote-control cars. The buying group is a longtime sponsor of Force’s cars, which feature the BrandSource logo.

Lawrence said the Traxxas line is “being offered to dealers who are interested,” but the upscale radio control line might be “a great idea for our rent-to-own dealers” due to its price.

And when asked if larger HES members or PRO Group members might sign up for BrandSource’s Expert Tech cCoud-based point-of-sale system, Ristow commented, “Our HES/PRO Source steering committee met during the show and evaluated it and was very impressed. They will be offering it to their members.”