That Cablevision has finally decided to cut its losses and divest The Wiz comes as little surprise to local CE dealers. What has them scratching their heads, however, is why the cable TV provider and entertainment company continued to support the stores as long as it did, and then pulled the plug just months after a completing a promising — and pricey — overhaul.
"The announcement came a lot sooner than we thought," said Rich Yanitelli, VP/merchandising and operations for 6th Ave. Electronics, one of only a handful of remaining metro-area CE chains. "It was not unexpected, but we thought that with all of the money that was pumped into the stores, Cablevision would have given them a little more time."
P.C. Richard & Son, the regional CE and majap powerhouse, believes the time for taking action had long since come and gone. "We weren't surprised about it closing, we were surprised it took so long — and that they spent good money recently on redesigning their stores," said VP/merchandising Gregg Richard. The bigger surprise, he added, was that "Cablevision, a company with no retail experience of any type, would get involved in the CE business" in the first place.
Bill Trawick, a former P.C. Richard merchant and current president and executive director of the NATM Buying Corp., was also taken aback by Cablevision's perseverance. "It's hard to believe they'd want to stay in a business that's losing the kind of money it was quarter after quarter," he said.
The bigger implications, he noted, are that CE-only stores are having a tougher time in the current economic climate than dealers who sell both brown and white goods, and that Circuit City and Best Buy "are certainly starting to have an impact on local retailers."
Warren Mann, executive director of the MARTA Cooperative of America and a local native, agreed with the latter. "The Wiz and P.C. Richard had the [New York metro market] in control for awhile without Best Buy and Circuit City around. When they came in, The Wiz was hurt more by Best Buy than anyone else."
But Gregg Richard argued that his company was also a beneficiary of The Wiz's woes. "It if wasn't for the store closings maybe we would have been down a couple of points for the fourth quarter. We benefited because they were in trouble, and the same thing will probably happen for us again as The Wiz closes down."
When that happens this June, both the local and national chains will likely consider select Wiz real estate in Connecticut, New Jersey and New York, including five coveted Manhattan sites. No one, however, envisions a Wiz-wide buyout.
"We can't imagine anyone who would be looking to enter the marketplace," said 6th Ave.'s Yanitelli. "Everyone who's tried has gone home with their tail between their legs."
NATM's Trawick concurred. "I'm not sure who I see out there who would have an interest in buying The Wiz. It's a very, very competitive market, a pricing bloodbath, and I don't know how they would make it work."