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Independent Dealer: Big-Box Emperors Wear No Clothes

The following letter to the editor was submitted by Richard Ingram, president of Stansbury AV, a family-run A/V specialty dealer that has served the Baltimore area for more than 30 years.

To The Editor:

I recently read about Denon and Boston Acoustics selling to Circuit City.

It always amazes me how the big-box stores get media credibility right up until the moment that they crash and burn. This continues the myth that the big boxes are more stable than the local A/V specialist.

Circuit City is obviously in financial trouble and has been for a number of years, not unlike Tweeter. However, these product-placement announcements are always presented as another coup for the giants instead of, at least in this instance, D&M being able to cut an unbelievable deal because of Circuit City’s desperation.

Consumers are given the impression that the big-box store is so solid. I always remind my customers of Ames, Ann Taylor, Bombay, Crazy Eddie, Domain, Foot Locker, Fortunoff, Harvey Electronics, Hecht’s, Kmart, Levitz, the catalog retailer Lillian Vernon, Linens ‘n Things, Luskin’s, Montgomery Ward, Tower Records, Sharper Image, Starbucks, Wickes and Zales.

Speaking of Starbucks, it’s interesting to note that all of its stores are company-owned and that 700 are being closed, while Dunkin Donuts, a main competitor, is franchised and showed a 10 percent increase during the same quarter.

The success of McDonald’s also came from local franchise ownership. In the 1980s and 1990s greed took over and McDonald’s began to buy back franchises and only opened company-owned stores. By 2002, for the first time in the company’s history, it went in the tank. Jim Skinner, vice chairman and CEO of McDonald’s since 2004, has since turned it around by focusing more on entrepreneurs and local community involvement.

One reason the big-box stores want to keep their financial situation quiet could be related to a new study released last month. It found that the vast majority of Americans would abandon their buying plans if the company behind the brand they were considering for purchase filed for bankruptcy.

Very few of our customers have a clue about Circuit City’s or Tweeter’s financial issues.

The point is that there are thousands of us independent dealers giving hands-on, quality service to consumers, yet the major manufacturers still only want to really dance with the big-box stores.

That is why they get burned when one of them bombs.