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NATM Hangs Tough Despite Weak Market


– The NATM Buying Corp.’s 11 leading
regional retailers are riding out the recession
by cutting costs, opening stores, entering
new categories and otherwise hunkering down
until the economy recovers.

“Our members are strong and well-financed,”
said the buying group’s president and executive
director Bill Trawick, and NATM is maintaining
its market share in a stagnant, if not declining,
environment for TVs and major appliances.

Speaking at the group’s annual conference,
held here last week at the Ritz-Carlton, Trawick
and NATM operations director Michael Maund
pointed to consumer insecurity, the ailing housing
market and flat-panel saturation as key contributors
to flagging CE and majap sales.

Indeed, the group’s white-goods dollar volume
was up only slightly in the first half of 2010
over a weak year-ago period, thanks to an artificial
boost from the federally funded appliance
rebate program. But trends have soured again,
the executives said, and factory shipments of
appliances are returning to negative territory.

Another “major concern” for Trawick is TV.
Unit volume, which grew last year as average
selling prices fell, was flat for the first six months of 2010 and is beginning to run negative despite vendor
price drops and bundled giveaways. Labor Day was
particularly disappointing, Trawick said, and some TV
manufacturers have already lowered their forecasts for
the year.

The dour sales environment has left Trawick looking
forward to Black Friday, when even fiercer CE and majap
promotions, and the suspension of MAP policies,
“should bring people into stores.”

Gregg Richard, president, P.C. Richard & Son: “Business
is not fantastic. It used to be predictable but now
it’s up and down. Things will get better but will it be in
six months? Three years? When [the economy] does get
better we’re going to be in a really good position. In the
meantime we’re still private and we’re still profitable.”

Peter Edwards, president, Video Only, noted, “It’s a
struggle. The housing slowdown came late to our market
[Seattle] and things are a little sluggish right now, but it
should turn around by 2011.”

Bob Perlman, CEO, BrandsMart USA, commented,
“There is business but it’s tough and it takes a lot of

Sam Yazdian, president, Electronic Express: “TV unit
volume is up but dollar volume is flat to down because
of all the promotional pricing. Our appliance business is
good, even without the rebates in Tennessee, because
of replacement business after the flooding in Nashville
last spring.”

In the meantime, the buying group is considering new
tactics to help bolster its members, including operational
initiatives to reduce costs and a direct-sourcing program
to bring in accessories and other categories from China.

NATM has also extended its mix to gaming and PCs,
with Nintendo, Microsoft, Sony PlayStation, Dell and
Samsung’s computer division among the conference’s
first-time attendees.

The group also received a major boost with the return
of Abt Electronics and P.C. Richard & Son, which raises
NATM’s annual sales volume to $5 billion and more than offsets
the revenue loss of former members Queen City (to the
Nationwide Marketing Group) and Bernie’s (to bankruptcy).

Dealers themselves are combating the soft economy
by opening new stores, relocating older ones, and testing
new formats and product categories. P.C. Richard plans
to open its seventh Connecticut store in October along
with a regional distribution center to support them, Gregg
Richard told TWICE, while Abt continues to add new categories
like jewelry, water heaters and HVAC (heating,
ventilation and air conditioning), president Mike Abt said.

Similarly, Florida-based BrandsMart USA, which recently
opened a fourth Atlanta superstore, is launching
its first “small”-format showroom Oct. 10 near the upscale
Dadeland Mall in South Miami. CEO Bob Perlman
said the smaller format, which is roughly half the size of
the chain’s typical megastores, opens up more real estate
opportunities while keeping the same assortment.

The store will also employ new merchandising concepts
and services, such as a combined TV and audio
presentation, valet parking, and an interactive display
concept for its wireless department that features live
pre- and post-paid phones across all carriers and MVNOs
(mobile virtual network operators), and 32-inch
screens showing product features and videos.

Further north, Tennessee-based Electronic Express
will relocate its 8,000-square-foot Murfreesboro store to
a new 26,000-square-foot location in October, making it
the largest in the 17-store chain, and is building a new
site for its Tullahoma store that should be completed early
next year. President Sam Yazdian said the expansions
will accommodate the company’s recently added appliance
assortment and a re-merchandised PC department
that has been extended to 1,500 square feet.