More P.C. Richard Store Openings Loom Even As Chain Awaits Recovery

DALLAS -- While waiting for the economy and consumer confidence to improve, P.C. Richard & Son will continue to open new stores, President Gregg Richard told Consumer Electronics Daily at the NATM Buying Corp. conference here. It has opened 13 in the last year and a half or so, and two more will soon open, he said. The company is “setting ourselves up” to be perfectly positioned once the economy rebounds, he said.

The retailer will open a new store in Enfield, Conn., in late October, and a 350,000-square-foot clearance center in Carteret, N.J., just off the New Jersey Turnpike and in front of its existing warehouse there, in the same time period, Richard said. The Enfield location is a former Circuit City store (CED Aug 10 p5), just like all but one of the 13 stores that already opened in the past year and a half, he said. The only new store of the 13 that wasn’t, in Milford, Conn., was a former Linens ‘n Things location, he said. Luckily, the Circuit stores had a “similar footprint” to the average P.C. Richard store, he said. P.C. Richard is also moving its Wayne, N.J., store about 200 feet to a former Circuit location, he said. No other store closures are planned, and “we always look for opportunities,” he said when asked if more openings are planned.

Underscoring the “opportunities” that Circuit’s demise created for P.C. Richard, Richard said “we weren’t even in Connecticut two years ago.” It also allowed P.C. Richard to enter the Philadelphia market for the first time, he said.

P.C. Richard also recently renovated its 50 other stores with new displays and fixtures, allowing it to significantly expand the product assortment in videogames, home office, and digital imaging, Richard said. It was only in the videogame category “in a very small way” before, with hardware but only a small amount of software and accessories, he said. It’s now selling software “the right way” for the consoles, with about the top 100-150 game titles for all the Microsoft, Nintendo and Sony platforms, he said. It took about six months for the renovations to be rolled out across all stores, he said.

The retailer talks with the videogame manufacturers, but for now it’s getting product via distributers in that category, Richard told us. Although videogame sales have been down industrywide this year, the category has been “a phenomenal success” for P.C. Richard so far this year, he said. It’s helping attract new customers to its stores, including younger consumers, whereas before the retailer was “almost forcing them to go to our competitors” to buy games, he said. There’s strong consumer interest for the new Kinect for Xbox 360 and PlayStation Move motion control systems, and P.C. Richard will “of course” sell the Nintendo 3DS when it ships next year, he said. Richard said he was just hopeful that supplies will be adequate for the coming holiday season. There was spotty availability on the PS3 and 360 consoles for much of this year, but Wii supplies improved from 2009, he told us.

Overall TV sales are “good,” but “challenging” now for the retailer, Richard said. Sales in units are up for the category year to date, but revenue is about “flat,” he said. While plasma TVs and LED-backlit LCD TVs are doing well, CCFL-backlit LCD TV sales are “probably the most challenging” now, he said, echoing other NATM members at the conference.

"We felt it could only help us get better by belonging to a group with retailers across the country that are in the same business as us and face the same challenges as us,” said Richard of his company’s decision to rejoin NATM early this year. It was “not, for us, really all about buying,” but instead “operational issues” including installation, advertising and finances, he said. “It’s all about sharing ideas on what was successful … and trying to learn from people that are doing things differently or better than us."

There was also “certainly a comfort level with” Bill Trawick, ex-P.C. Richard, being NATM’s current president and executive director, Richard said. Trawick had been trying to convince the firm to return to NATM for a while, the NATM head said. P.C. Richard left NATM in 1995 and started a buying group with hhgregg. But it hasn’t been affiliated with a buying group in recent years, Richard said. Now was “the right time for us” to return to NATM, Richard told us.

NATM Conference Notebook

"I don’t know what to say that’s positive” about business this year, Bill Trawick, NATM president and executive director, said in a state of NATM address at the conference Wednesday night. He predicted that next year may end up being no better. After a promising first half, he said, “we've seen some softness” in TV sales in the back half of 2010, while the appliance business has “declined dramatically” in the last 3-4 months. “It wasn’t Wal-Mart,” Target, Home Depot, the Internet, warehouse clubs or “to some extent” Best Buy who built the appliance and CE retail business, he said. It was regional, family-owned dealers like those who are members of NATM, he said. “I wish we could go back to those days” when Sears accounted for 45 percent of the appliance business in the U.S. because independent retailers were still able to be profitable in the category, trying to take a piece of the 55 percent left, he said. Today, national retailers have more than 70 percent of the appliance business and it’s much tougher for independent retailers to compete, he said. Trawick pleaded with suppliers not to “forget us,” the retailers “that built the business.” He asked for “a level playing field” with the national dealers, who he claimed are “destroying what we spent 100 years building” despite accounting for much of the volume sales for suppliers. The scan-downs and bundles that national retailers crave might be bringing in traffic, but they are shrinking margins and sales are slowing despite the discounts, he said. National dealers just can’t introduce and demonstrate new technology and products to consumers as well as independent retailers like those in NATM can, he claimed. While the independent dealers used to get new technology products first, they are now sold to all dealers right away, and before they “even land on” the selling floors of national retailers, the items are “discounted,” he said. As a result, new products like 3D TVs have “struggled,” in part because consumers are buying products from national dealers and not understanding what they've bought, he said. He asked suppliers to once again offer certain new products to independent retailers first. “We have to get back to doing things that can bring some profitability,” to retailers and manufacturers, he said. “If we don’t make changes,” there may be only five retailers left “down the road,” he said. If dealers and vendors “continue on this path, we're heading for doomsday,” he warned.