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Incredible Universe Opening Off B’way

“You could say, that like a play, over the past three years we worked the kinks out off Broadway,” said Rich Hollander, VP-general manager of Tandy’s Incredible Universe, as he helped open the chain’s first gigastore in the metropolitan area.

Technically, the chain is still off Broadway: The area’s first Incredible Universe, and the chain’s 12th nationwide, was unveiled last month in the Long Island suburb of Westbury, N.Y.

However, Tandy has certainly worked out the “kinks” as Hollander put it. During its first weekend in operation, September 15-17, the 185,000-square-foot store drew over 100,000 consumers and had sales of over $3 million, an opening weekend record for Incredible Universe.

The Westbury event was smack in the middle of an Incredible Universe expansion spree this fall. Here is the schedule, with the major cities each location is near: New York, September 15; San Diego, September 22; Houston, September 29; Washington, D.C., October 6; and Salt Lake City and Charlotte, N.C. in November. By November the chain will have 17 stores nationwide.

Tandy claims that a new Incredible Universe location will have up to $65 million in sales the first year, and the Long Island store is expected to do a little more than that. More mature locations do as much as $80 million to $100 million annually.

The company took the occasion of the Westbury opening, which coincided with the Robertson, Stephens & Company conference in Manhattan (see story on page 7) to hold a press conference with Tandy chairman John Roach and Incredible Universe VP-general manager Rich Hollander to outline company strategy.

During Roach’s presentations at the Robertson, Stephens event and Tandy’s press conference the same day, the chairman said that the five-year plan for Incredible Universe is the following: increase its profit contribution to the company each year; penetrate the top 35 markets in the U.S., with 27 stores in operation by the end of 1996, in all the top markets by the year 2000; expand its multi-store market strategy; build customer loyalty; and increase its ability to sell services such as DSS, Internet-related products, cellular, cable and other services.

About the service business, Roach noted that “everyone wants to get in everyone else’s business.” In this case “everyone” refers to local telephone companies, long distance telephone companies, online services and cable operators. With Incredible Universe, RadioShack and Computer City, he said, “We are ready to get involved in everyone else’s business.”

At the press conference, Hollander said that one of the goals for Incredible Universe is to improve gross margins, although the chain was profitable during the past 12 months. However, privately Roach qualified that later by saying, “We are profitable at the store level, but not corporately.”

As with many Incredible Universe openings, Roach and Hollander outlined how the company is fine-tuning its merchandising approach and product selection. And among their strategies:

* Incredible Universe will do more direct marketing during the next 18 months, using its new Incredible Innovations magazine as well as online services.

* New product categories will be part of Incredible Universe, including an emphasis on home theater. Hollander said each store will have 10 systems on display.

* The new Westbury store features two new categories — watches and ceiling fans — which were described by Hollander as having “above average gross margins.”

* During the past three months cookware has been added to IU’s small appliance area.

* And fitness equipment, which the chain experimented with, has been dropped, but the personal computer category has been expanded.

In terms of expansion and store size, Hollander said that Miami and Dallas “might be two markets where we will have multiple stores.”

The New York metropolitan area will have two next year, the Westbury location, and the Newark, N.J. store that should open during the third quarter of 1996.

Earlier this year Roach said that a third Incredible Universe might be possible for the market, and when asked for a possible location, he cracked, “Look at the map. It doesn’t take a rocket scientist to figure it out,” meaning New York City’s northern suburb, Westchester County.

The new Houston store, which opened September 29, is the largest IU yet at 200,000 square feet. When asked if Tandy would open smaller IUs in the future, Roach said, “We would consider it. We have to see how we like the Houston store.”◊[headline]Computer City, RadioShack Outline New Plans Tandy chairman John Roach, Computer City president Alan Bush, and RadioShack president Leonard Roberts took advantage of Incredible Universe’s press conference heralding its Westbury N.Y. opening to discuss new corporate and divisional changes.

The most changes involved Computer City, which has a store-opening plan for 1996 through 2000 of 20 to 30 new stores per year, 20 Superstores and 10 Express outlets, Roach said. Its five-year strategy includes “new merchandise departments, new service departments, and expansion of marketing programs.”

“Computer City has transitioned from a start-up to a mature operation, using Tandy’s infrastructure,” said Bush.

During 1994 the chain’s sales were $1.2 billion, this year they should hit $1.9 billion, and by the year 2000 sales of $7 billion are projected to come through 250 stores, he said. By the end of this year the chain will operate 99 stores, 66 domestically, and the balance in five markets overseas.

Bush also announced an agreement with Power Computing to become the exclusive superstore retailers of Apple Macintosh-compatible systems. “We will go after the Mac educational market sell these products not only in each of our stores, but through our corporate sales and Computer City Direct Groups.”

Each of the Power Computing systems will feature the 100MHz PowerPC 601+RISC processor, a 256K Level Cache, Quad-Spin (4X) CD-ROM, and 15 software titles. The vendor has also authorized Computer City’s Technical Service Departments as service centers for the line.

Bush noted that Computer City will add and broaden product lines, such as cellular phones, modems and video conferencing.

Computer City also plans to build a large direct-mail program, Bush said. “We mail our catalog to 1 million consumers, and many of them shop by mail order.”

And the chain will become the first national retailer in the American Airlines AAdvantage Program, starting November 1. One AAdvantage mile will be awarded for every pre-tax dollar spent. Product purchases, software training classes, and certain repairs and installations will be considered qualifying purchases.

Reviewing much of what was discussed during an August press conference in New York (TWICE, August 21, page 4), RadioShack’s Roberts reported that the chain has reached an agreement with Sony for its Repair Shop operation to do in-warranty repairs on the manufacturer’s products. This agreement is similar to other strategic agreements with ADT Security Systems, GTE, IBM, Monitoring Systems, Nokia and Orca.–Steve Smith