Key America, the $3.5 billion buying group, will disband by year's end and its 16 regional chapters will be absorbed by Associated Volume Buyers (AVB) and Nationwide TV & Appliance.
According to AVB executive director Bob Lawrence, Associated will incorporate Key's three co-op chapters, Florida Key Distributors, Key Minnesota and Key Southwest, which represent about 600 independent dealers. Nationwide, in turn, will inherit the remaining for-profit chapters, representing some 800 stores. Neither Key America president Murray Provine nor Nationwide president Lee Guttman was available for comment.
Lawrence suggested the decision to disband Greenville, Ohio-based Key America was made by all of the involved parties in an effort to create greater buying efficiencies. "There was a lot of work done by a lot of people," he said about the consolidation. "It's something that needed to happen. There's a continued need to create better efficiencies, and we can do that by taking out some of our manufacturers' overhead and cutting their costs."
Lawrence conceded that some overlap of geographic territories would result from the addition of new Key America members, and that the logistics of AVB conventions going forward will become "relatively complicated" as a result of the integration.
AVB, with annual wholesale sales of $3.5 billion, currently has 15 chapters representing 1,800 stores. The $6 billion dollar Nationwide has about 165 member stores.
An official statement from the buying groups is expected Wednesday.