WAYNE, N.J. — Electronics Expo owner Leon Temiz is looking to dramatically downsize his business now that he has successfully bought it out of bankruptcy.
The Northern New Jersey A/V specialty chain, which operated seven showrooms and a clearance center at its peak, filed for Chapter 11 protection in March, citing mounting losses due to stricter pricing and marketing support policies by vendors.
Under a plan approved by creditors and a federal bankruptcy court, Temiz paid $1.5 million earlier this month to purchase the assets of Electronics Expo. He founded the business in 2003 after leaving Sixth Avenue Electronics, the now-shuttered New York-area A/V chain he ran with his brothers Billy and Mike.
The re-born Electronics Expo, operating under the newly created company Glamazon, will be a leaner operation, he told TWICE, with a greater focus on retail vs. online sales, and a plan to open small, 4,000-square-foot boutiques, in contrast with its traditional 10,000- to 16,000-square-foot showrooms.
The chain, a member of the ProSource buying group, currently operates two locations, and is consolidating its headquarters offices into the upper level of its flagship showroom, here. The store sits on the site of the former Fountains of Wayne outdoor-furnishings emporium, which served as a setting in HBO’s “The Sopranos” and from which the eponymous pop band took its name.
Temiz is considering closing the second showroom, which he owns, to clear the way for the smaller boutiques, which will help lower staffing overhead and better accommodate a significantly reduced assortment.
“Before, we did $150 million a year,” Temiz said. “We had a large company with big expenses. Now we’re looking to do 20 percent of that. We have to decide which 80 percent didn’t work and cut it out. We’re going after the cream.”
His new business model puts the company in line with current vendor discounting controls that were designed to restore profitability to key lines and allow brick-and-mortar retailers to better compete with lowoverhead e-tailers.
Temiz acknowledged in court filings that Electronics Expo’s business model had been based on aggressive promotional pricing, and that Amazon.com was a significant sales channel for the chain.
Under the new approach Expo’s focus will be on brick-and-mortar sales, with an emphasis on specialty audio, select TV categories and other limited distribution products, although e-commerce will remain an important part of the business.
“We have 170,000 reviews on Amazon,” he noted, and plans to leverage his online customer base by diversifying into jewelry, designer sunglasses and other luxury goods.
Temiz had been working toward his goal of relocating the chain’s large-footprint showrooms to smaller spaces when cash-flow issues prompted a major credit insurer to cut the company off last fall.
He said he immediately alerted his vendors, instructed them to stop shipping him, and turned away $4 million in Black Friday inventory. He later bought his vendors’ preference payments to prevent trustees from suing them for their recovered debts, and assumed liability for all taxes, gift cards, extended warranties and customer deposits.
“We were upfront and made sure we took care of our vendors,” Temiz said. “The good news for the industry is there is a way out, by being honest with the vendor community and working with them.”
Electronics Expo now has a bank credit line, and vendors are opening their own lines of credit. With industry support and the help of his old management team led by executive VP Rich Yanitelli, “there is a light at the end of the tunnel,” Temiz said.