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Q4 Optimism, Concern The Talk Of CEDIA

Optimism mixed with concern about the holiday season’s prospects set the mood for retailers and suppliers attending CEDIA Expo, here, earlier this month.

As usual, CEDIA was not just a conclave of custom installers and upscale suppliers, but also traditional retailers and major manufacturers. At receptions such as one co-sponsored by Brand Source’s Home Entertainment Source (HES) and the PRO Group, and another by Home Theater Specialists of America’s (HTSA), among others, market prospects were the main subject.

Several dealers and suppliers warned, albeit anonymously, that a prominent national chain or three may get too aggressive with price cuts this holiday season to gain market share. The result would be collateral bottom-line damage for retailers and manufacturers.

Retailers did say that sales were slower than they would have liked during part of the summer and some expect shortages of key HDTV models due to, as one put it, the “predictably unpredictable” type of year it has been.

At their first co-sponsored CEDIA Expo reception, Jim Ristow, HES general manager, and Dave Workman, executive director of the PRO Group, were both frank and philosophical about the marketplace in their formal remarks and in a subsequent interview with TWICE.

“The strength of the Alliance [between HES and PRO] shows that it works in tough times, and when we get to good times, we’ll be fine,” Workman said.

When asked about the “predictably unpredictable” description of business during the summer, Workman said, “That’s been true since the beginning of the year. There have been ups and downs. Did the government’s ‘cash for clunkers’ program hurt us [in the summer]? I really don’t know. There is no evidence of that.”

As for shortages, Ristow said, “There could be some shortages of key LED TV products.” But, he qualified, “The ‘best in class’ products should be fine in terms of supply, but in midrange products, there may be a problem.”

Workman said his members have seem “shortages in some [A/V categories] this month.”

In terms of sales, Workman said, “We see sales being better than last year [at this time]. There are problems by some retailers predicting demand while others are doing a good job, but we expect the next three months to be better than what some expect. The holiday season could be a pleasant surprise for some people.”

Ristow described meetings with suppliers and his members at CEDIA Expo as “inspirational … Our members are entrepreneurs and nothing is easy. Some have been in business for 20, 30 years and are looking at business models differently, looking to different categories and operating their businesses in more profitable ways.”

Workman said, “We held our second joint [membership] session” with HES and PRO dealers “and discussed best practices,” which both men said generated plenty of good ideas.

Richard Glikes, executive director of HTSA, was candid during his remarks at this group’s CEDIA Expo reception. He quoted his own HTSA Quarterly Fall 2009 editorial saying that his group’s sales were off 20 percent, but that “smart people can solve problems.”

One of those ways is to look at other related custom categories for growth. Glikes said HTSA members are looking at “solar, lighting, home control” and related categories related to home security to build sales.

When asked later if he saw up and down sales based on economic trends in certain parts of the country, Glikes said, “Not really. A high tide boosts all boats, but there hasn’t been much high water lately.”

David Pidgeon, president/CEO of Starpower, provided an upbeat view of the market during the HES/PRO reception. “There is pent-up demand. The football season has started. You have to have the right products and right promotions to draw traffic. To succeed now you must be a better merchant, provide better products and fine-tune your offerings to your customers.”

Also at the HES/PRO event, Bob Weissburg, president of sales and marketing, the Americas, for D&M Holdings, noted, “I see greater optimism by retailers. From what some have told me, there is guarded optimism on the market.”