NEW YORK – One door closes, another opens.
That was the way of the CE industry in 2014, which may prove to be a watershed year. Like most business sectors, CE was still recovering from the aftershocks of the Great Recession, which shook our retailers to the core.
Some never regained their footing.
This year saw the bankruptcy, closing, sale or absorption of American TV, Grant’s Appliance, J&R Music World, Alco, Brookstone, OfficeMax, Wirefly.com and HiFi House, and no doubt scores of other small independents that decided to call it quits.
We also bid a final farewell to a who’s who of industry luminaries, including CEA/CES visionary Jack Wayman; gentleman dealer and A/V advocate Vance Pflanz; Crosley Appliances president John Colbert; and founders George Feldstein of Crestron, Carl Korn of Cobra, and Godehard Guenther of a/d/s and Soundmatters, among others.
Transition was also evident in our institutions, as longtime TWICE editor in chief Steve Smith stepped back from his day-to-day duties, and buying group heads Bob Lawrence of BrandSource and Bill Trawick of NATM passed the baton to the next generation of leaders.
There was also a changing of the guard in our products. Legacy categories like pointand- shoot cameras, DVD and Blu-ray Disc players, personal music players and, dare we say, HDTVs, continued to give ground to a new continuum of technologies like 4K/UHD displays and a sky’s-the-limit range of connected devices that promise to transform the way we live.
So change is definitely in the air as we close out 2014, and that’s a good thing, because change has been and forever will be the lifeblood of this industry.
A Christmas Best Forgotten For Retail Chains
With its aggressive promotions, icy winter weather, late UPS deliveries and six fewer shopping days, the 2013 holiday selling season was best described by one retail analyst as “a comedy of errors.” But few retail chains, apart perhaps from Walmart, are laughing. Despite reported strength in CE, most retailers ceded share to the No. 1 discounter and lost out online to Amazon.com, the final tabulations showed.
Promos, Soft Demand Hurt Best Buy Earnings
Best Buy president/CEO Hubert Joly described “an intensely promotional holiday season” that, coupled with significantly slower foot traffic in December, contributed to a dip in holiday sales. Short supplies of next-gen gaming consoles and Apple and Samsung tablets, as well as weakness in legacy categories, were other factors that forced the retailer to lower its fourth-quarter and full-year earnings outlook.
TWICE/Cosmo Panel: Women Are A Key CE Demographic Ways to attract millennial women, and female customers in general, were discussed in a CES “Digital Divas” panel headed by TWICE senior editor Lisa Johnston, and featuring Sue Katzen, associate publisher of Cosmopolitan, and top female execs from Ingram Micro, Voxx International and Harman. Their conclusion: Retailers need to do market research, engage in social networking, analyze features and design, as well as hire more millennial sales women to sell CE to that key demographic.
Discounts Helped Spur Solid Super Bowl TV Sales
Retailers and vendors evaded a series of blocks and tackles to stir Super Bowl demand with discounted TVs. Following a sluggish holiday season, the industry was eager to clear out any remaining inventory in advance of an early 2014 model year. But severe arctic weather; a regional contest between two Western teams; spotty inventory; and a still-recovering economy presented challenges before the Big Game.
Industry Saddened By American’s Planned Closure
Friends and suppliers of American were saddened, if not surprised, by the TV, appliance and furniture chain’s announcement that it would shut its doors in April, after succumbing to a mix of strategic missteps and economic pressures. The privately held retailer, which had served Wisconsin and surrounding markets for 60 years with as many as 15 big-box stores, said it is going into receivership due to an “unforgiving” economy, and had already commenced liquidation sales.
Sony To Shutter Two-Thirds Of Its Stores
Sony said it is closing 20 of its 31 remaining company- owned stores as part of a massive restructuring that will include 5,000 layoffs and the sale of its Vaio PC business. Newly named president/COO Mike Fasulo described the moves as “extremely tough” but “absolutely necessary” to help ensure future growth. The company operated 44 Sony Style stores at its peak in 2008, excluding outlets, and was the 20th largest CE merchant in 2012, according to TWICE’s Top 100 CE Retailers Report.
Dealers Encouraged By 4K And Connectivity
Despite a soft holiday season and an icy start to the new year, the top merchants on TWICE’s annual Retail Executive Roundtable were bullish on 2014. Why? Bluetooth for one. Wireless connectivity remains a new concept to most consumers, panelists said in an exclusive report, and the sky’s the limit for A/V dealers that can creatively demo the technology and the plethora of compatible products. Retailers also have high hopes for Ultra HD TV this year as lower prices and more native content are expected to spur demand, they said.
Throgmartin Leaving hhgregg hhgregg executive VP/COO Gregg Throgmartin, son of the chain’s late chairman Jerry Throgmartin and scion of the founding Gregg and Throgmartin families, announced plans to leave the company and his seat on the board to pursue outside interests and manage family businesses. He would resurface in April as CEO of BikeStreet, a specialty bicycle chain.
Distributors See Opportunities In Changing Market
CE retailers have avenues for growth and profitability during 2014, but they will have to adapt to changing categories and changes in ways consumers like to shop, according to a consensus of distributors contacted by TWICE. Most are convinced that Ultra HD, highres audio and home networking will have a positive effect on the market this year, especially for those retailers that can explain and demonstrate the advantages of these new technologies.
Nationwide Adds Dealers, Sales And Services
The Nationwide Marketing Group said it rode a wave of dealer additions, rebounding appliance demand and “outstanding” furniture growth to add $1 billion in sales volume over the past 18 months. More than half of those gains came from the furniture channel, but appliances also put in a strong performance, delivering their best year since the category’s peak in 2005. The positive sales trends, detailed at the group’s biannual PrimeTime show, are being fanned by a host of service and merchandising initiatives designed to help independent dealers exploit market share opportunities, include waning sales volume at Sears and the vacuum in Wisconsin left by American TV’s pending closure.
Vance Pflanz, 75
Pflanz Electronics president Vance Pflanz, an active CEA member and a beloved veteran of independent A/V retail, died at 75 after suffering a stroke. “Our association has lost a true friend and leader,” CEA president/CEO Gary Shapiro said, citing his service, leadership and legacy of programs to help support independent dealers. Bob Lawrence, CEO of the Brand- Source buying group to which Pflanz belonged, called him “a remarkable individual” who embraced change fearlessly and made “major contributions to our members and to the industry. We salute him.”
ProSource Debuts, Upbeat On Prospects
BrandSource’s Home Entertainment Source (HES) and Progressive Retailers Organization (PRO Group) divisions officially became one with the formal emergence of ProSource at the parent group’s spring convention. Jim Ristow, formerly head of HES, was tapped as co-president and chief business officer, while Dave Workman, late of PRO, was named co-president and COO. Under development for four years, the new organization will have three tiers of membership that is well positioned for the coming boom in home automation and connectivity, the executives said.
J&R Shutters Showroom
J&R Music & Computer World shut its venerable showroom in Lower Manhattan for what it described as a conceptual overhaul. The closely held specialty dealer, founded in 1971 by namesakes Joe and Rachelle Friedman, did not say when or if the store would reopen, and in an open letter posted on their website, the principals thanked customers, staff and vendors “for what has been an incredible 43 years.” The couple also acknowledged the “12 difficult rebuilding years” following the 9/11 attack that toppled the nearby World Trade Center. J&R’s website would also close in the ensuing weeks, although the brand resurfaced in the summer as an electronics boutique within a neighborhood department store.
Walmart Enters Used-Game Business
Walmart followed GameStop’s lead and has begun buying used video games for store credit. The discounter, which pegs the number of U.S. gamers at more than 110 million and the number of unused titles sitting in homes at nearly 1 billion, will also join GameStop (and Best Buy) in selling pre-owned games later this year. “Gaming continues to be an important business for us and we’re actively taking aim at the $2 billion preowned video game opportunity,” said Duncan Mac Naughton, chief merchandising and marketing officer for Walmart U.S. “When we disrupt markets and compete, our customer wins.”
Retailers, Suppliers Adapt To Download Era
Home-audio suppliers have adapted to the massive shift from physical media to digital media, and retailers have begun to follow suit. To remain relevant in the era of digital downloads and streaming, dealers such as Gramophone and Barrett’s Technology Solutions have embraced products like networked A/V receivers, soundbars, tabletop-audio systems and powered speakers, and have taken pains to ensure they can demonstrate them and educate consumers about their advantages, the retailers reported.
TigerDirect Targeting Home
TigerDirect, the multichannel IT and CE retailer, is dramatically broadening its assortment with an eye toward the home. The company, a division of Long Island-based Systemax, is looking to become the retail destination for home automation, and to expand its customer base beyond tech enthusiasts and small- to medium-sized businesses by adding mattresses, furniture, home fashions, wall safes and even pool supplies to the mix. “We want to get into your home,” marketing director Steven Leeds told TWICE. “We’re really expanding our selection [as] TVs, PCs, tablets and laptops become more of a commodity.”
Samsung, Sony To Open Display Areas Within Best Buy
In a major revamp of its home theater departments, Best Buy is bringing in vendor-funded Samsung and Sony A/V demo sections to hundreds of its stores. The “Experience Shops” will feature enhanced fixtures, interactive demonstration areas and will be manned by dedicated, vendor-trained Blue Shirts, with a focus on 4K UHD TV. The rollouts, which are expected to be completed over the summer, continue Best Buy CEO Hubert Joly’s strategy of parceling out in-store real estate to brands like Microsoft and Samsung Galaxy to improve sales floor productivity and update the showrooms.
CE Retail Sales Flat In 2013
Cumulative CE sales for the industry’s 100 largest dealers were flat for the second consecutive year in 2013, edging up just 0.3 percent. According to the annual TWICE Top 100 Retailers Report, volume held steady at nearly $131.9 billion last year. But the seemingly stable results belie the Sturm und Drang of the marketplace, in which strong performances by a handful of retailers offset single- and double-digit declines for the majority. Factors included the lack of a big-ticket CE hit, continued shopper migration online, and the lingering effects of the Great Recession.
Conn’s Leaves NATM To Enter More Markets
Conn’s bid the NATM Buying Corp. adieu after 23 years as its ambitious expansion strategy began encroaching on fellow members. The move came as the company proceeded with plans to open upward of 23 stores this year and enter the new markets of Colorado, the Carolinas, Mississippi, Nevada and Tennessee, where it will knock heads with NATM members Electronic Express, R.C. Willey and Cowboy Maloney’s.
CE Chains Look To Ultra HD, Majaps To Bring Holiday Cheer
The country’s two largest CE and appliance specialty chains are pinning their hopes for Holiday 2014 on just a handful of product categories. In separate conference calls following their quarterly earnings reports, the top brass at Best Buy and hhgregg cited advanced TVs, major appliances and gaming as key fourth-quarter drivers. In the interim, Best Buy foresees continued CE softness for itself and the industry in the second and third quarters as consumers wait out the next big product launch – ostensibly iPhone 6 – although both companies see longer-term opportunities in wearables and home automation.
Top 100 Majap Dealers See 9 Percent Sales Spike
Major appliance retailers and vendors witnessed a watershed year in 2013 as the industry finally shrugged off the lingering effects of the Great Recession to post the strongest sales numbers since 2008. But even more noteworthy, this month’s TWICE Top 100 Major Appliance Retailers Report showed, was that the longreigning king of majaps, Sears, was finally dethroned, slipping to the No. 2 perch, behind Lowe’s, after spinning off its Sears Hometown Stores business.
Distributors Say Emerging Categories Will Drive Growth
CE distributors expect several up-and-coming categories to drive demand and profits during the back-half of the year. Specifically, Ultra HD TV should have a big second half with suppliers about to hit key price points for specific screen sizes; wearables are just about ready to go prime time, with health and fitness products leading the way and smart watches not too far behind; and home automation, which has been around for years, is ready for its close-up due to improved technology, wireless offerings and consumer awareness, as well as lower prices, the companies said.
Top 25 Car Electronics Dealers Down, But Not Out
Car electronics sales volume generated by the nation’s top 25 car electronics retailers declined at a faster rate in 2013 than it did during each of the previous two years, but once again, their collective sales didn’t drop as much as the market as a whole, TWICE found in compiling its latest list of leading dealers. The top 25’s retail-level sales fell a collective 10.3 percent to $3.2 billion (excluding installation revenue) from 2012’s $3.6 billion. In contrast, industrywide factorylevel car electronics sales fell at a faster rate of 12.3 percent, to $2.5 billion, Consumer Electronics Association (CEA) statistics showed.
Walmart Revamping CE Departments
The world’s largest retailer is resetting its CE sections to allot more space to growth categories like wearables, gaming, prepaid mobile and tablets, and is placing complementary products in closer proximity. The entertainment “reboot” seeks to revive soft CE sales by “adjusting our space-to-sales ratio to make sure we’re leaning in where the growth is,” said executive VP and general manager Steve Bratspies. He told TWICE the remodel will also promote “natural adjacencies,” like the fortuitous placement of Beats by Dr. Dre headphones near an iPhone display, and “bigger brand presentations,” such as an interactive Samsung endcap featuring a 60-inch LED TV and soundbar.
Sam’s Club Foresees A 4K Holiday
Wal-Mart’s wholesale club division is gearing up for a big holiday in Ultra HD TVs. “We stand for technology,” Dawn von Bechmann, senior VP of technology, entertainment and office told TWICE. To that end, the stores will variously carry a selection of 55- and 65-inch models by LG, Samsung and Vizio, while curved OLED displays will serve as the departments’ lead-off product. “We won’t sell a lot [of OLED models] but they’re symbolic,” von Bechmann said. “Members expect us to educate them and show them what’s ahead.”
Changing Of The Guard At TWICE
TWICE editor in chief Steve Smith announced plans to step back from his day-to-day duties after 21 years to become editor at large. He would later be succeeded by longtime managing editor John Laposky. For the past two decades Smith – and under his leadership TWICE – have earned numerous awards and industry accolades for chronicling and analyzing the torrents of new consumer technologies and ever-changing industry dynamics. Laposky plans to further enhance TWICE’s brand franchise by extending its social-media footprint and expanding content and coverage.
CE Merchants Look To Bountiful Holiday Season
CE sellers are gearing up for a merry holiday season following last year’s disappointing Christmas and a constrained first quarter. According to merchants queried by TWICE, severe weather, a shorter selling season, and inventory tightness contributed to a winter of discontent for dealers and vendors. And while no one knows what Mother Nature will bring in Q4, dealers are encouraged by a recovering economy and housing market, popular price points for Ultra HD TV, and a consumer who’s bursting at the purse strings with pent-up demand.
Staples Ups Ante In Wearables, Home Automation
Staples made a major statement in wearables and home- and small-business automation products with a dramatically expanded assortment and a rollout of dedicated displays to 500 stores starting July 15. A total of 148 Staples Connect automation SKUs will be available online, and about 40 to 50 will be displayed on an 8-foot fixture rolling out to 250 stores, while another 250 locations will get a 4-foot home-automation display. All 500 stores will also feature 8-foot wearables displays with about 50 SKUs, including products in different colors.
Top 25 Imaging Dealers Report Declining Sales
In a sign of continued difficulty for the camera industry, the country’s top 25 digital imaging retailers reported another year of revenue declines from digital camera and camcorder sales for 2013, according to TWICE’s fourth annual Top 25 Digital Camera and Camcorder Retailers Report. Collective sales of the top 25 digital imaging retail chains fell 2.1 percent to $8.2 billion (including only digital camera and camcorder revenue) from 2012’s $8.4 billion. Last year’s figures were down 1.7 percent from 2011.
Wireless Stores Make A Play For CE Dollars
Legions of CE stores have turned into memories in recent years, but carrier-owned stores and independent wireless specialty stores have emerged to take their place in selling consumer tech devices that connect to smartphones. The products include stereo headphones, Bluetooth and Wi-Fi speakers, smart watches, fitness bands and trackers, MiniHDMI projectors, action cameras and home-automation systems. The stores are leveraging store traffic to sell the high-margin add-ons, offer complete solutions, and increase the value of the wireless service they sell by showing consumers what they can do with a smartphone.
Lawrence Bids Dealers Adieu, For Now
It was a bittersweet BrandSource convention at Caesars Palace this month, where Bob Lawrence helmed his last show as the buying group’s CEO. The former Maytag manager took charge over 20 years ago, helping to transform the organization from a fledgling buying co-op into a $13 billion CE, appliance and home furnishings powerhouse with some 4,500 members. Lawrence formally stepped down at year’s end, and he hopes to continue in a narrower role, perhaps guiding the group’s distribution or finance programs.
Amazon, Apple Tops In Online Sales
Best Buy may be the top banana in total CE sales, but when it comes to e-commerce, Amazon, Apple and Walmart are the channel masters. According to TWICE’s inaugural Top 20 CE E-tailers Report, Amazon lords over the Internet with $15.6 billion in electronics revenue last year. Apple was a distant second at $4.4 billion, followed by Walmart at $3.6 billion. Best Buy came in fourth place at $3.5 billion, followed by Dell with $2.8 billion in online sales in 2013.
Back-To-School Spending Bodes Well For CE
CE dealers that did their homework should be at the head of the class this month. According to the National Retail Federation (NRF), spending on electronics was expected to outpace all other back-to-school and back-to-college categories. Shoppers will spend an average $212.35 on CE products this season, up 7 percent from last year, polls showed, with total outlays reaching $8.4 billion. Spending was even greater for high school students and their families, who said they will fork up an average $229.88 on electronic devices. But the college crowd was where CE spending really soared: College kids and their parents planned to spend an average of $243.79 on tech, up 20 percent over last year, while topping all grades were graduate students, who planned to spend an average $275.24 on electronics.
Nationwide Dealers See Businesses, TV Sector Poised For Rebound
Following a stagnant winter marked by severe weather and supply constraints, independent dealer members of the Nationwide Marketing Group enjoyed renewed appliance and CE sales and continued strength in furniture. According to the management team of the retail merchandising and services organization, a recovering economy, a strengthening housing market and a slew of innovative new products will drive growth this season and beyond. They said dealers are now more bullish amid improving industry conditions and economic indicators, and had already doubled their orders year over year in advance of the group’s biannual PrimeTime meeting and buy fair in Nashville, Tenn., this month.
Amazon Launches Controversial M-Payment Program
CE merchants criticized a new mobile payment program from archrival Amazon.com that can provide the e-tailer with confidential customer and pricing data. The program, called Amazon Local Register, features a free mobile app and a secure card reader that can be purchased for $10. Transaction fees are 2.5 percent. The platform accepts all major credit and debit cards; is compatible with Apple devices running iOS7, select Android smartphones and Kindle Fire tablets; and the app provides a suite of business tracking tools, dedicated customer support, and compatible point-of-sale accessories like cash drawers and receipt printers that are available, naturally, on Amazon.
CEDIA Expo Brings Buzz To CE Biz
CEDIA Expo 2014 proved to be a more dynamic show overall than in the recent past. Attendance grew for the second consecutive year, this time by 3 percent to 18,500, and showgoers were treated to several “game-changing” technologies, including the first U.S. viewing of LG’s 4K OLED TVs and giant-screen LED LCD TVs; a diverse range of new Dolby Atmos surround-sound demonstrations; and a bevy of homeintegration advancements.
NATM’s Trawick Passes The Baton
Bill Trawick presided over his final annual meeting as executive director of the NATM Buying Corp. After 15 years at the helm, the 51-year industry veteran passed the baton to former Thomson, Toshiba and DSI distributor exec Jerry Satoren at year’s end. Following a funny and moving tribute from former employer Gary Richard, principal of P.C. Richard & Son, Trawick thanked group members, staff, vendors and family for their friendship and support in an emotional farewell address.
Reaction Mixed To Electrolux-GE Pairing
Electrolux’s $3.3 billion buyout of GE Appliances garnered mixed reviews. According to the consensus, the melding was a win-win for the manufacturers, which have complementary businesses and face an increasingly competitive marketplace. But the deal, Electrolux’s largest ever, left some retailers feeling queasy over the consolidation of market share and the loss of the second major white-goods supplier in eight years, following Whirlpool’s absorption of Maytag in 2006.
TigerDirect Gives Form To Home-Automation Category
The IT retailer and direct-seller unveiled a new “store of the future” format that features an interactive homeautomation department among other showroom enhancements. The 400-square-foot connected-home section, dubbed TigerConnect, has 10 dioramas representing the various rooms in a house, plus a fullsized home-theater section and a live security camera display. The tablet-controlled vignettes graphically demonstrate various remote functions like lighting, security and leak detection on the Insteon and Zwave platforms, and were custom-designed to make the concept more comprehensible to consumers, the retailer said.
RadioShack Gets A Lifeline
Facing insolvency, RadioShack received a last-minute lifeline from shareholder Standard General, which led an investor group in a $120 million cash-for-equity swap to tide the chain through the holidays. Standard General also replaced GE Capital as lead lender behind RadioShack’s $835 million asset-backed loan, and agreed to loosen its borrowing terms.
And The Award Goes To …
TWICE announced the winners of its annual Excellence In Retailing awards program. This year’s recipients included: The Little Guys, for running the consummate A/V and custom integration business and its tireless advocacy of home technology; Appliance World, for thriving in the shadow of P.C. Richard with exceptional service and an acclaimed showroom; Tiger- Direct, for heralding CE at its annual consumer expo and developing a top-notch home automation experience; Staples, for betting big on wearables and home automation; and Best Buy, for providing a national showcase for 4K/Ultra HD TV.
Grant’s Fails, MacMall Closes And Conn’s Reconsiders
October got off to a busy, if mixed, start for retail with the sudden shuttering of Grant’s Appliances, the closing of MacMall’s last showroom, and a surprise announcement from Conn’s. Grant’s closed without warning after serving greater Chicago for over 80 years, perhaps succumbing to a recent onslaught of hhgregg stores and a fired-up Abt Electronics. Mac- Mall was in the process of closing the last of four storefronts as parent company PCM narrowed its focus on commercial IT services, while Conn’s, which has been outperforming its retail peers, said it may sell the business or spin off its credit operation amid mounting defaults by its lower-income customer base.
Best Buy Rolling Out Connected Home Sections
Home automation came to the masses this fall as Best Buy began rolling out dedicated connected home sections. The chain installed the departments in 400 stores, and filled them with over 100 wireless security, thermostat, lock, garage door and networking products and services from established vendors and startups including Dropcam, Nest, Honeywell, Philips/ Hue, Kwikset, Chamberlain, DirecTV, ADT and Belkin WeMo.
Black Friday Came Early, Stayed Late, And Didn’t Disappoint CE Dealers
The Thanksgiving/Black Friday sales tally was down year over year, as early and prolonged promotions, and fewer discount-dependent customers, took a toll on the weekend totals. The good news, for CE retailers and vendors, was that 45 percent of all shoppers bought or planned to buy tech products over the holiday weekend, more than in any of the last three years, according to CEA. The other big winner: mobile shopping, which accounted for fully 42.5 percent of all online traffic on Black Friday, an increase of 21 percent, Monetate reported.
Distributors See Glad Tidings Galore This Holiday
CE distributors said dealers have plenty to be thankful for as they head into the thick of the holiday season. At their disposal lays a vast arsenal of engaging technologies to drive traffic and sales including 4K/Ultra HD TV; advanced audio, including UHD-ready AVRs and Dolby Atmos systems; wearables; iPhone 6 accessories; and the next-gen Wii U, Xbox One and PS4 gaming platforms.
Sears Gets Connected
Sears said connectivity will become the centerpiece of its CE business. Under the plan, TV, along with other smart or connected devices like tablets and Bluetooth speakers and headphones, will be become part of a broader connected-solutions platform, explained Ryan Ciovaco, Sears’ president of connected solutions and consumer electronics. “We are shifting the focus of our electronics business away from simply selling traditional electronics products into one that leverages both the industry growth area of smart technology and Sears’ existing capabilities in fitness, appliances, electronics and home services,” he told TWICE.
Multiple Factors Driving Custom-Channel Growth
Systems integrators are defying the odds. Despite the still-stagnant housing market, the custom industry continued to grow at double-digit rates of 10 to 17 percent at the wholesale level, and installers forecast a 20 percent gain in average revenue this year, to $1.8 million, according to a CEDIA survey. Driving the gains are stepped-up marketing efforts by installers to upgrade and expand previous installations; the higher selling prices of 4K/Ultra HD and OLED TVs; the stock market wealth effect; and the advent of Dolby Atmos surround-sound products.
Cyber Monday Sales Up 16%
Online sales on Cyber Monday rose 16 percent to $2.7 billion, Adobe reported, while mobile devices comprised 19 percent of those purchases. The mobile channel was even wider for Walmart: Fully 70 percent of its online traffic between Thanksgiving and Cyber Monday was mobile-based, the discounter said, and described Cyber Monday as its biggest single day ever for online orders.
Best Buy Licensing Sharp Brand For Direct-Sourced TVs
Best Buy demonstrated that its strategy of offering product and brand exclusives is still very much in play for the all-important TV category by structuring a deal to license the Sharp name for use on an exclusive line of small-screen LED TVs. Under the agreement, the retailer will direct-source Sharp-badged TVs from a third-party manufacturer, but under the supervision and approval of Sharp. The chain also carries an exclusive line of Panasonic LED TVs, although that program is supplied by Panasonic.
Walmart Makes The Connection
Walmart completed its previously reported connected- devices connection with the rollout of dedicated Internet of Things displays to some 2,000 stores this holiday season. The dual-sided fixtures feature a selection of wearables on one facing and a collection of connected home items on the other. The rollout was followed by a major shakeup within Walmart’s merchandising ranks, as chief merchandising officer Duncan Mac Naughton left the company and hardlines chief merchant Steve Bratspies moved to food.
RadioShack Bailout Challenged
A pair of RadioShack lenders claimed that the company’s bailout by Standard General violated the covenant of their $250 million term loan facility and demanded immediate repayment. The deal in question, a $120 million cash infusion and the assumption of GE Capital’s $535 million asset-based loan, was seen as an answer to RadioShack’s prayers. In a blistering retort, the chain’s beleaguered CEO Joe Magnacca said the claims by Salus Capital Partners and Cerberus Business Finance were wrong, self-serving and guided by narrow self-interest. The lenders hold a second lien on inventory and receivables, the value of which would shrink if Magacca’s plan to close 1,100 stores gets Standard General’s approval.
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