HES Emphasizes Its Strengths At CEDIA Expo

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Home Entertainment Source (HES), a unit of the Brand Source buying group, acknowledged the current market but emphasized its strengths at its annual reception for its members and suppliers during CEDIA Expo, here.

Jim Ristow, executive director of HES, said, "The bad news is that there are tough [economic] times." But he said the good news is that there is strength with independent CE retailers and its Expert Warehouse program.

Ristow echoed the words of Progressive Retailers Organization (PRO) Group executive director Dave Workman at its reception, saying that the combined CE buying power of HES and the PRO Group, which they have agreed to call "The Alliance," has $4 billion in CE buying power. In contrast, annualized sales of Circuit City was tabulated as $10.574 billion during 2007, according to the TWICE Top 100 CE Retailers Report.

Ristow said the group sees consolidation on the retail and manufacturer level in the near future, as well as "video commoditization."

To think ahead, he said the group moved to form "The Alliance" with PRO to "circle the wagons" for step-up goods and develop a channel strategy.

Ristow said that while PRO and HES are separate, "The Alliance" will "expand our channel ... because consumers want service."

He said that with "The Alliance," its Expert Warehouse will enable "opportunity buys" for both HES and PRO members, but that "day-to-day" benefits will go only to HES members.

"The Alliance" means that for the industry, "We are the place to go for upscale CE," Ristow said.

Expert Warehouse sales in CE are up 57 percent in dollars before the PRO deal and up 70 percent in units, Ristow said.

He urged that his retail members emphasize "fewer vendors ... to make us more important."

Ristow emphasized that after the economic malaise is over, Best Buy, Wal-Mart, Amazon, Sam's Club and Costco, along with HES, will still be standing and giving CE a "strong" national presence.

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