CANTON, MASS. — Tweeter Home Entertainment Group has reached an agreement in principle to acquire Charlotte, N.C.-based SMK Marketing Inc., which operates three Audio Video Systems stores. The companies plan to complete the transaction around June 1.
Audio Video Systems is a 13-year-old specialty CE retailer with annual sales of approximately $15 million. A fourth store is scheduled to open this summer. That unit, along with the three existing stores, will assume the Tweeter moniker at that time.
The deal comes just weeks after Tweeter, which now operates 96 stores nationwide, announced plans to buy Big Screen City, a four-store CE specialty chain with locations in San Diego and Temecula, Calif. Both buyouts continue Tweeter's corporate strategy of growth through acquisition.
Tweeter expects to fund its latest acquisition through a combination of cash and stock with a current value of about $4.75 million.
"The Audio Video Systems acquisition helps us fill one of our remaining geographic 'holes' on the East Coast," said Tweeter president/CEO Jeff Stone, adding that the company plans to operate more than a dozen stores in North Carolina going forward.
The upmarket specialty chain also plans to open stores this summer and fall in the greater Nashville, Tenn., and Greenville, S.C., areas, he said.
"We started the year with 90 stores and will have added 11 stores by year-end through acquisition," added chief financial officer Joe McGuire. "With our organic growth plans already progressing nicely for the fiscal year, we expect to end fiscal 2001 with 119 stores or approximately 33 percent store-front growth."
Hand-in-hand with its growth plans, the company has brought its name to two more outdoor amphitheaters — the New World Music Theatre in Chicago and the E-Centre in Camden, N.J. — through an association with SFX, a producer and marketer of live entertainment. The outdoor venues, rechristened Tweeter Center and Tweeter Center at the Waterfront, respectively, join the SFX-owned Tweeter Center in Boston and the HiFi Buys Amphitheater in Atlanta as part of the retailer's growing roster of name-in-title agreements.
Said Tweeter marketing VP Noah Herschman, "We feel that our association with these SFX venues will be a great aid in building our brand in these markets and nationally." He added that the company's customer share increased 146 percent in Boston after acquiring the naming rights to the Tweeter Center there.