Douglas Howe, ex-Nikon, one-time GE, moves to Olympus as Consumer Products Div. mktg., planning & research VP... Dennis Cox advances at AST Computer to U.S. consumer sales VP... Robert Pierce, a marketing veteran who held exec posts with such firms as Aiwa, Ricoh and Magnavox, and most recently with a rep organization, moves to Emerson as car audio div. sales VP... Les Groobin, ex-AT&T Consumer Products, named Uniden Consumer Products west region sales mgr... Dilip Patel, former Philips Ottowa, Ohio picture tube plant mgr., joins Thomson's N. American Tube Div. as Marion, Ind. plant operations mgr... Joseph Graziano resigns as Apple CFO... William Herron named Go-Video quality engineering mgr... Mary Moran, Brother mgmt. info systems dir., named VP... Bruce Harreld, former Boston Chicken pres., joins IBM as sr. VP-strategy. James Cannavino, former IBM top strategist, named pres.-COO of computer consultant Perot Systems... Dean Cobb named mktg. VP for metal storage products marketer Atlantic... Among Kodak div. gen. mgrs. named div. presidents: VP Joerg Agin, Motion Picture & TV Imaging, who continues as gen. mgr., Entertainment Imaging Mkts. Development; and sr. VP David Biehn, Consumer Imaging... David Yaun, former Sony PR supervisor for camcorder and wireless products, moves to Conners Communications as Consumer Electronics Group dir... New officers of the International Auto Sound Challenge Association: Ron Trout (Rockford Fosgate), pres.; Tom Walker (Audio Control), VP; Jeff Scoon (Xtant), secy; and Steve Haddad (Music System), treas. Bruce Terrell of Mag Sales and Carolyn Lantz of SHR Perceptual Motion, named to board.
Mike Keskey promoted at Best Buy from Chicago region mgr. to sales VP. New mdse. mgrs.: Lance Binley, ex-Good Guys, video, and Jeff Manly, ex-Office Depot, computer hardware. Joining as sr. buyers: Jeff Broviak, ex-Venture Stores, peripherals, and Erick Vincent, ex-Navarre, productivity software... Ronald Rittenmeyer, ex-Burlington Northern Railroad, named Merisel pres.-COO, assuming some former duties of Michael Pickett, who continues as chmn.-CEO. Archie Miller advances from field sales VP to gen. mgr. of the newly formed Advanced Products Group... Good Guys mdse. mgr. appointments: Jerry Leone, home office/interactive; Michael Scharff, audio; John Keating, video, furniture & accessories. John Chin appointed games buyer... Thomas Shull, one-time Macy's exec VP, joins Federated Dept. Stores as vice chmn. for administration of Federated Mdsg. and Federated Product Development... Michael Dyer, former Klipsch VP, joins the retail co-op distributor Assured Systems as sales & training dir... Bill Ward named electronics buyer at Apex Dept. stores succeeding Goeff Biederman who left the company... Paul Hanson advances at Deutsche Financial Svcs. to VP, national accts. dir... William Luehrs advances at Zenith from sr. VP to pres., Network Systems.
Elizabeth MacPherson advances at Showtime Satellite Networks from retail mktg. dir. to DBS dir. Denise Gobin-Ramsarran promoted to NE sales mgr. for the retail direct-to-home business. Cheryl Sperling joins as SE region sales mgr... Matthew Sappern advances at HBO from mgr. to dir., DBS, Ku-band mktg. Trish Bragg promoted to acct. mgr... Craig Tanner named sr. VP-advances technologies at Tele-TV, the phone company joint venture formed to provide wireless cable TV. Karen Stevenson named exec VP-gen. counsel... James DeRose, ex-Mattel, named pres., Acclaim Interactive... Robert Brownell resigns as Media Vision Technology CEO and sales VP... Bob O'Connor, former Jensen home audio dir., named Konami sales VP... Deborah Cheek-Wahler, ex-MicroProse, named gen. mgr. of an a joint Capital Cities/ABC and Spectrum Holobyte venture to develop PC games for marketing under the ABC Sports logo... Mike Wilson joins id Software as marketing VP.
Fedders Net Up 41% To $29.5M In Fiscal 1995
Despite a seasonally caused sharp decline in fourth-quarter results, room air manufacturing specialist Fedders turned in solid double-digit sales and earnings gains for fiscal 1995.
Fedders had a net of $7.35 million for the three months ended August 31, down 28.8% from the $10.3 million earned in the same fiscal 1994 quarter, while sales, at $78.1 million, declined 11.4% from the year-earlier $88.3 million.
But even with that significant drop in final-period results, Fedders' net for the year jumped 40.6% to $29.5 million from the $21 million of the preceding years, while sales climbed 36.6% to $316.5 million from $231.6 million.
In fiscal 1994, Fedders had a one-time $1.78 million post-tax gain from an accounting change. Excluding that, Fedders's fiscal 1995 net would be up 53.6%.
Fedders said that while industry U.S. unit shipments of room air conditioners during its fiscal year were up just 12%, its shipments jumped 30%. Fedders credited that sharp rise and the resulting increase in market share to its "accurate-response production program which enabled the company to meet customers' just-in-time requirements."
Fedders said that dealers, who were caught short of room air inventory in 1994, sought to avoid the same thing happening this year by "taking a larger percentage of their deliveries in the third quarter of fiscal 1995," which ended in May.
The result of that increased summer stockpile at retail, "was lessened demand on Fedders in the fourth quarter," the company said.
Partially compensating for the earnings drop resulting from the quarter's lower demand, said Fedders, was an increase in its gross margin to 23.9% of sales from the 22.2% in the same year-earlier quarter -- "due in part to a $3.5 million reduction in warranty provision, an outgrowth of continuing improvements in quality." That was offset to a degree by a $2.8 million equipment write-down.
Also impacting profitability in the quarter was an increase in overhead expenses that stemmed mainly from a $2 million for the start of an early-retirement incentive program.
Fedders is looking ahead to yet another year of strong room air demand. Because of this year's hot summer, the company said, "inventories are again substantially depleted at both retail and manufacturer levels entering fiscal 1996."
Harvey Group, In Ch. 11, Given New Credit Line
Harvey Group, parent company of New York-area retailer Harvey Electronics, has signed a letter of intent with an investor group to provide the chain with $1.5 million in credit.
The parent company, which filed for Chapter 11 protection at U.S. Bankruptcy Court in New York during August (TWICE, August 21, page 44), will use the credit support to fund a reorganization plan and the company's emergence from Chapter 11.
Harvey has already received an initial installment and expects the balance of the funds on or before November 1.
Art Shulman, president, told TWICE that the new funds will "enable us to place orders for the Christmas season. It should also accelerate our emergence from Chapter 11." Shulman anticipates that to happen "in January or early February of next year."
Harvey's new investors are "from the financial community with no ties to the [consumer electronics] industry. They are excited about being part of our business. We look forward to going back to basics and becoming retailers again," Shulman said, alluding to strenuous efforts by the company's management over the past year to secure additional financing for the firm.
Harvey Electronics operates six high-end audio/video and home theater stores in the New York metropolitan area.
CE Retailers Posted Strong Sept. Sales
But comparable-store results were soft
Although total sales showed relatively strong growth for consumer electronics/ appliance specialty retailers in September, double-digit sales gains in same-store sales were the exception, rather than the rule.
Here's a rundown on the month's sales performance by reporting dealers:
Audio King reported a September sales total of $5.97 million, up 26% from September last year, and a strong 17% gain in same-store sales.
"The sales performance was a reflection of consumer acceptance of our promoting specialist marketing strategy," said president Gary Thorne. Since the end of the month the eight-store Minneapolis-based chain completed the move of its Edina outlet to a larger location.
Best Buy said its September sales were up 40% to $438 million. The Minneapolis chain's comparable stores had a 5% rise. During the month Best Buy opened seven new stores, including three in the Los Angeles area, three in the Baltimore/ Washington market, and one in Chicago. It now has 231 outlets, of which 144 are considered comparable.
Campo Electronics, Appliances & Computers had September sales of $26 million, up 57.4% from last year. But the 31-store New Orleans-based retailer said comparable-store sales were down 3%.
Circuit City put its September sales total at $558.7 million, up 33%, and credited comparable stores with an 8% increase. The chain said its comparable-store growth was limited by an industrywide shortage of PCs preloaded with Windows 95. However, the situation eased in October. Additionally, the chain noted, September sales were bolstered by an extra Saturday, which will reduce by one the number of Saturdays in October.
Circuit City continued its expansion by adding stores in September with store openings in Fresno, Santa Barbara and San Diego, Calif., and Minneapolis, Chicago, Waco and Nashville. It entered Colorado Springs, Colo. and Salisbury, Md. with one store each; opened larger replacement stores in Greenville, S.C. and Winston-Salem, N.C.; and expanded an outlet in Los Angeles. It ended the month with 381 electronics stores and four used car lots.
Good Guys, which only reports sales results on a quarterly basis, said sales rose 19% in the fiscal fourth quarter ended September 30 and were up 23% to $889.2 million on the year. Same-store sales were up just 1% in the quarter and 7% on the year.
During the quarter the San Francisco-based chain opened six stores, including WOW, a multimedia venture in Las Vegas with Tower Records, two each in Oregon and Southern California, and one in Seattle. It ended the year with 66 outlets.
Roberds said total sales were up 9.7% for the month to $24.1 million, but comparable stores had a 10.7% decline. For nine months the Dayton-based chain had sales of $215.8 million, up 19.3%, with same-store volume up 1.7%
Tandy reported that sales at continuing U.S. and Canadian retail operations were up 29% for the month to $476.5 million and revenue at comparable stores rose 8%.
"New store expansion is the principal focus of the fall," said chairman John Roach. During the quarter, he reported, Radio Shack opened 78 stores, increasing net new stores for the year to over 100. Computer City opened eight new stores, "setting the stage for them to be the largest computer superstore chain in the fourth quarter," and Incredible Universe opened four outlets, bringing their total to 14.
On the financial side, Roach said that "one-time legal and plant-closing charges will decrease our earnings outlook by about 6¢ per share [or about $4 million], primarily affecting the September quarter. While the charges are relatively modest in the quarter, we are still comfortable with the outlook for the year."
Ultimate Electronics said its September sales shot up 72% from the same month last year, with nearly all the gain coming from recently opened outlets. Comparable-store sales edged up just 4% in total, 13% when the sales drop in the first of the chain's two Salt Lake City outlets is discounted. President Dave Workman said he was pleased with the results of the chain's late-September entry into the Boise market with a 37,000-square-foot store and said Ultimate expects to open its 18th store later this year in Tulsa.
Separately, Ultimate filed a registration statement for a secondary 1.4 million share issue which, at recent prices, would raise about $15 million. Only 100,000 of the offerer shares are from insider holdings. The rest are from the company.
Among broader-line retailers with a strong electronics/appliance presence:
Ames Department Stores, a 307-outlet Northeast discounter, had sales of $189.4 million for the month, off 0.8%, and a 1.5% decline at comparable stores. Ames said that while overall September sales were disappointing, CE sales were up from last year and ahead of plan.
Best Products had a 5.3% drop to $128.1 million in September sales, and comparable-store volume was off 8.5%. The catalog retailer said its consumer electronics sales continued to be soft.
Heilig-Meyers had a 14.9% September sales rise to $92.6 million, but sales at comparable stores slipped nearly 1%.
Kmart said September sales at its domestic Kmart outlets rose 5% to $2.64 billion, with comparable stores showing a 5.5% rise. The company said both hardline and softline categories had gains.
Sears domestic store revenue rose 6.8% in September to $2.47 billion, with comparable-outlet sales of 4.5%. Kenmore-brand refrigerators were among products cited by chairman Arthur Martinez for their strong growth performance during the month.
PriceCostco sales rose 10% in September to $1.71 billion, with comparable warehouse outlets showing a 4% rise.
Target's sales exceeded expectations in September, with an 18.3% total volume increase and a 9.1% rise at comparable stores, parent Dayton Hudson reported. However, it noted, the sales growth came "primarily in low-margin commodity businesses."
And Wal-Mart had net sales of $8.39 billion in September, up 13.2%, including a 3.9% rise at Sam's Club to $1.75 billion. Comparable-store sales were up 4.8% at Wal-Mart outlets and 2.6% at Sam's Club.
Sears Splits Home Group Into Hardlines And Home
Sears has split its largest business unit, Home Group, into two entities -- Sears Hardlines and Sears Home -- and has named veteran merchants Bill Salter and Marvin Stern to head the respective businesses.
Sears Brand Central, as well as its Home Improvement/Lawn And Garden operation, will be part of the new Sears Hardlines unit. Salter, VP-general manager of home appliances and electronics, has been named president of Sears Hardlines. Salter's previous position will not be filled at this time, according to Sears.
Sears Home covers off-the-mall, home-related stores and services, including Sears Hardware stores, HomeLife furniture stores, Sears dealer stores, product services, and home improvement products and services. Stern, president of Sears Home Group, has been named president of Sears Home.
Salter, 52, and Stern, 59, who at one time headed Sears Brand Central, will both report to Sears' chairman-CEO Arthur C. Martinez and will be members of the company's executive committee.
In a prepared statement, Sears said the split is an attempt to accelerate growth of its off-the-mall stores and services and continue to revitalize its mall-based stores and services.
Martinez noted, "We are continuing with an aggressive five-year, $4 billion store renovation plan begun two years ago."
Although the strategy for consumer electronics in Sears' Homelife stores has not yet been set, a company spokesman said it will open 300 outlets during the next five years but will probably not have a electronics buying operation from Brand Central.
Sears also said it plans to open 700 to 800 Sears Dealer stores nationwide during the same five-year period. Sears currently operates up to 800 department stores nationwide.
Amid Financial Woes, HTPI Ends NASDAQ Listing
Home Theater Products International is voluntarily delisting its shares from the NASDAQ national market as it no longer meets the requirements for financial disclosure.
HTPI's auditor resigned and withdrew his opinions of the accuracy of the company's financial statements for the 1992-1995 fiscal years ended June 30. He now questions the accuracy of the information HTPI supplied to him and the integrity of its management. Additionally, in a published interview he alleged that HTPI substantially overstated its sales and that it probably had losses instead of the reported net profits.
In the wake of the allegations, a representative of Brookstreet Securities has been appointed chairman of an HTPI Shareholders Protection Committee, formed to represent non-management holders. The committee has retained legal counsel.
The financial upheaval comes just as HTPI was concluding a significant distribution agreement with Ingram Micro. HTPI said it was giving Ingram one-year non-exclusive worldwide rights to distribute selected Paramount-brand wireless speakers and headphones, and powered multimedia speakers.◊[byline]JVC Company of America (JCA) has named Katsuhiko Hattori as president-CEO and has given longtime executive VP of sales and marketing Harry Elias the additional responsibilities of chief operating officer, a newly created position.
Hattori comes from Victor Company of Japan, where he was general manager of overseas sales and marketing. He replaces Hajime Hazama, who will continue as president of US JVC Corp. and general manager of JVC Corporate Management Division for the Americas.
Hattori reports to Hazama, who had been president of JCA since March 1992. Elias has been with JCA for the past 27 years.
EIA/CEG, Stereophile Use Letters In Duel Involving Audio Exhibits
By Joseph Palenchar
The promotional battle between competing hi-fi trade shows intensified when the EIA Consumer Electronics Group, in a letter to potential exhibitors, panned the upcoming Stereophile show for its cost and warned of the magazine's potential to punish companies that don't participate in the show.
The EIA/CEG Specialty Audio & Home Theater Show, concurrent with CES Orlando '96 and CES Habitech, is to run in Orlando May 23-25. Stereophile's five-day Hi-Fi '96 Home Theater & Specialty Audio Show is planned to start in New York City less than a week later on May 29.
The letter, signed by EIA/CEG VP Gary Shapiro, also claimed the association could "guarantee coverage by all industry publications" and implied that Stereophile couldn't.
In response, Stereophile mailed its own letter from publisher Larry Archibald to potential exhibitors in which, he told TWICE, it "gently joshed Gary" about mentioning the possibility the publication might bad-mouth or ignore the products of non-exhibitors. Although generally lighthearted, the letter did advise Shapiro to "avoid the mud, take leave of innuendo, and stay clean."
Archibald told TWICE, "I'm gratified that most people thought Gary looked silly in saying it, but I'm offended that he did say it." He faulted the association for resorting to "classic fear tactics" and stated that "there has been no pattern of favoring people because of their show participation."
Chris Browder, president of the Academy For The Advancement Of High End Audio, also took issue with the EIA. "The need to put out something like that must reflect the need to harness some momentum that they felt they needed for their show," he said.
He also complained that the EIA letter failed to mention that the Academy is sponsoring the Stereophile show's two trade days, which will precede three consumer days. "A major reason for our sponsoring the [trade portion of the] show is to make members of the press other than Stereophile comfortable in supporting the show and sending their editorial people," he said. Browder also said he has received assurances from most magazines that they will participate editorially
In his letter, Shapiro stated: "I understand that Stereophile has only one thing on CES: fear. CES has heard from many companies concerned about Stereophile punishing them for not exhibiting with bad reviews or by ignoring their products. We don't know if Stereophile will do this. We do know that the perception exists, and we know that it exists for the good reason that the potential exists."
He also contended that the cost of exhibiting in Orlando is lower at a net $16 per square foot with hotel rates of $126 plus 11% tax. In comparison, Shapiro said, rates for the New York show run to $29.17 per square foot, with hotel rooms going for $209 plus more than 13% tax.
Archibald contended, however, that on a per day basis, the EIA's charges per square foot are about 6% more expensive than the New York show's. In addition, he said, Hi-Fi '96 reaches both the trade and consumer markets. Hi-Fi '96 is "in a great hotel [the Waldorf Astoria] in an expensive city. We think $25 per square foot is a pretty good deal under those circumstances."
At the end of September, 82 retailers and manufacturers had committed to exhibiting at Hi-Fi '96, and the manufacturers represent 151 brands, Stereophile said. "We're not having a hard time selling the show," Archibald added. "Where is their list of exhibitors?"
To show that its goal is to increase participation at the Orlando show, not get companies to avoid Hi-Fi '96, the EIA/CEG said, it will organize and help pay for a convoy of trucks to ship exhibits from Orlando to New York. Excluding loading and unloading labor, EIA/CEG will pay for hauling products and displays up to 500 pounds from each exhibitor.
Sega Reduces Saturn's List Price To Match Sony PlayStation's $299
By James K. Willcox
In a move that effectively eliminates any price advantage enjoyed by Sony's Play-Station video game, Sega lopped $100 off the price of its 32-bit Saturn, bringing the basic console cost down to a matching $299. Since neither system can be used without software, the prices are designed more to hit a retail price point than to be of real meaning to consumers, and in fact, they end up increasing consumer costs.
Although the new Saturn core pack doesn't include any full games, it contains playable samples of two Saturn games, Bug! and Panzer Dragoon. A bundled package that includes Saturn and one title, Virtua Fighter Remix, carries a $349 list -- the game itself sells for $69.99.
Mike Ribero, Sega's executive VP of sales and marketing, says the new pricing is a result of an improved yen-to-dollar ratio, better production capabilities, and high demand for the product.
Sega's price drop comes just as the company ended a promotion designed to counter the PlayStation launch. It offered free copies of two early Saturn titles -- Clockwork Knight and Worldwide Soccer -- to customers who bought the $399 Saturn, which already came packed with Virtua Fighter.
As a result, the $299 point really is a price increase rather than a decrease, Gerard Klauer Mattison analyst Sean McGowan points out.
"As part of its promotion, Sega was in essence giving away three $50 titles for free," McGowan says. "If for $399 you were getting three games, and now at $299 you're getting none, it's a little spurious to call it a price decrease."
Nonetheless, the price parity with Sony's PlayStation should help narrow the gap between sales of the two systems, which McGowan says have been between 3:1 and 5:1 in favor of the PlayStation.
"Sega has great software capability, so I wouldn't count them out. By the end of the year, I think PlayStation will have outsold Saturn by 2:1," he says.
Sega says that since May consumers have already bought 120,000 Saturns, although several analysts contend that number reflects sell-in as opposed to sell-through. "I don't think they're there yet," McGowan says of the figure.
Last month, Sega cut from $149 to $99 the price of Genesis 32X, the 32-bit upgrade for the 16-bit Genesis console. The cut spiked sales of the device "in our top markets," according to Chrissie Huneke Kremer, director of marketing for the product. "And we expect to see a more significant increase as more of our fall titles roll out."
Separately, speculation in Japan is that Nintendo's next-generation system, Ultra 64, may come to market next year at $200 -- $50 below its originally scheduled price. Nintendo officials could not be reached for comment.
Bush, Homma, Rosenberg Are ADL Honorees Alan Bush, Computer City president, and Milton Rosenberg, president of Bernie's Audio, Video-TV, Appliances in Bloomfield, Conn., will receive Torch of Liberty Awards, and Sanyo Fisher president Mitsuru Homma will receive the S. David Feir Humanitarian Award at the annual dinner dance of the Electronics, Home Office & Appliance Industries division of the Anti-Defamation League.
This year's event will be held at the New York Hilton on Saturday evening, November 11. For information contact Hy Friedman, ADL (212) 885-7865.
1ST HALF 1994-95 COLOR TV* ESTIMATED SALES TO DEALERS BY SCREEN SIZE
Sales Sales % Share Share
Direct-View 1995 1994 change 1995 1994
33"-&-over 169,400 216,800 28.0 1.7% 2.2%
28"-32" 401,700 530,200 32.0 3.9% 5.3%
27" 1,565,800 1,644,100 5.0 15.3% 16.5%
26" 177,800 8,000 -95.5 1.7% 0.1%
25" 1,902,700 1,826,600 -4.0 18.6% 18.3%
20" 1,905,400 1,448,100 -24.0 18.6% 14.5%
19" 2,294,500 2,409,200 5.0 22.4% 24.1%
13"-14" 1,603,000 1,538,900 -4.0 15.7% 15.4%
12"-&-under 206,200 369,000 79.0 2.0% 3.7%
Total Direct-View 10,226,500 9,991,000 -2.3 100.0% 100.0%
50"-&-over 122,200 17,600 -85.6 51.9% 5.8%
49"-&-under 113,300 125,000 10.3 48.1% 41.5%
Total Projection TV 235,500 300,900 27.8 100.0% 100.0%
Total Market 10,462,000 10,291,900 -1.6 100.0% 100.0%
*Excludes TV/VCR combinations * TWICE 1995
JVC Company of America's Harry Elias, continues as senior VP of sales and marketing and has added the title of chief operating officer.