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NECO Divisions Now Allied With BrandSource

Three of four chapters of the NECO Alliance, one of the country’s largest appliance buying co-ops, have formed an alliance with the BrandSource buying organization.

The chapters, which had comprised the Northeast division of the rival Nationwide Marketing Group for nearly 20 years, formally made the move on Jan. 1.

The partnership was confirmed at this week’s BrandSource Summit in Orlando, Fla., which is doubling as a welcome party of sorts for the NECO units.

NECO left Nationwide as of Dec. 31, 2015. At the time of the split, president/CEO Dave Bilas said the departure was unexpected, but that several of NECO’s largest dealers would continue their affiliation with the $15 billion merchandising group.

Jim Ristow, CEO of BrandSource, told TWICE that three of the four former NECO chapters formed “an official alliance with AVB [BrandSource’s parent company] as of Jan. 1. They are here [at the Summit] to discuss business services and share expertise.”

Ristow did not elaborate on how the three divisions will operate within BrandSource or how many retailers they bring with them.

NECO, an acronym for The Northeast Company, was an amalgam of four regional buying cooperatives that banded together to serve independent dealers along the Northeast corridor.

The chapters — Appliance Dealers Co-op (ADC), Intercounty Appliance Corp., Dynamic Marketing Inc. (DMI), and the New England Group, comprised of the former Boston Group and Nationwide of Connecticut — are unique in that they own and operate their own distribution centers. This allows the group to take factory-direct shipments by the container load, which lowers the cost of goods, spares members the overhead of holding their own inventory, and provides same- or next-day delivery of small-lot orders.

The late Jay Lebowitz, principal of Long Island dealer Mr. Jay Appliances and one-time president/CEO of Intercounty, is credited with fomenting NECO’s creation by bringing the regional rivals together. “All the chapters were fighting one another,” he once recounted for TWICE. “We neutralized each other’s ability to get better pricing from vendors. So I called my archrival, Vinnie Capuano of DMI, and I said if we don’t come together, we’re going to die.”

Today the group serves more than 700 showrooms from Northern Virginia to Maine; operates more than 1 million square feet of combined warehouse space; holds its own annual buying show in Connecticut; and enjoys well north of $1 billion in annual sales.

Before its creation, NECO’s individual chapters belonged to competing buying groups, including the old Key America organization. But under the unified NECO umbrella, the group hitched its wagon to Nationwide, where it had remained until late last year.