CE Retail Veterans Mourn Demise of American TV & Appliance

CE industry retail veterans mourned the news Tuesday that 60-year-old regional chain American TV & Appliance will shutter its stores after a going-out-of-business sale that begins Thursday. The 10-store retailer said Monday in a news release that it’s “going out of business forever.” CEO Doug Reuhl called the closing a “sad moment,” attributing the closing to “an unforgiving economy,” saying “the last five years have been very difficult for our industries.” In addition to CE, American sold furniture, mattresses and appliances, a category expansion that other retailers such as h.h. gregg have adopted to offset declining video margins.

"I'm sad because I've known them for a long time,” said NATM Executive Director William Trawick. “It shows you how tough it is out there for some people. I find it tough that we're losing another substantial retailer,” Trawick said. American joined the NATM group in 2012 but left the group a year later (CED Oct 4 p4).

"It’s a sad day,” said longtime CE retail veteran Richard Glikes, now president of the Azione Unlimited buying group for custom installation dealers. Another retail chain demise “puts a pall over things,” he said. Glikes referred to his 25 years in retail where he “loved the pulse” of selling home entertainment products and where the dealer-customer exchange was a “feel-good” experience for salesperson and customer, he said. “It was fun,” he said, contrasting the retail experience of 20-30 years ago matching buyer to AV gear to today’s impersonal Internet shopping that’s about “buying cheaper” at the expense of performance. “You can thank Amazon and Walmart for killing retail and jobs,” he said.

The American TV close hits home for Paragon Video and Stereo, a mom-and-pop audio store in Madison, Wis., that prides itself on its customer relationships and longtime expertise in the audio/video business. President Steve Puntillo helped launch American TV’s audio business in the early 1970s when American was branching out from appliances into the emerging hi-fi business, Puntillo’s wife Mary, vice president of Paragon, told us.

As American was growing its hi-fi business, Steve Puntillo would borrow repaired equipment from the store’s service department “and put it out on the show floor just to look like they had more stuff,” Mary Puntillo recalled. When the hi-fi business took off, so did Steve, who started to sell stereo gear out of his apartment before opening his own business in a $90/month storefront in Madison, Mary said. “Forty years later,” she said, “we have this lovely building in one of the prized retail neighborhoods in town,” where the store sells new and used equipment and services electronics. “I never thought I'd live to see the day that the giant whose shadow we have been living under has decided it won’t work anymore,” she said.

The Puntillos might see some residuals from American’s departure from the Madison market, Mary Puntillo said, but she doesn’t expect to feel that until fall. Paragon has managed to succeed by doing business the way it always has, she said. Mom and pop work full time and they have one salesperson. Their gear is “some of the nicer stuff,” and they take trade-ins. Paragon prides itself on keeping up on new technology and explaining it to customers. When DVD first arrived, Paragon had the players but movies were in short supply except in select big cities. Mary would check release dates and take customer orders, then drive the 120 miles to Chicago once a week to load up on discs.

"We've seen change,” Mary Puntillo said. These days the store is teaching kids what they need to be able to play a turntable, which they are finding in thrift stores, family members’ attics and garage sales. “They're used to playing an iPod,” she said, so the store staff introduces them to receivers and speakers. Mary introduces older customers to streaming and goes to homes to help them fit electronics into their lifestyle.

Glikes of Azione also believes audio may hold hope for specialty CE retailing. “I'm encouraged because people are buying turntables again,” he said. Video drove the business for a long time, but now “margins are well below break-even on a regular basis,” he said. He cited the loss of Mitsubishi, Fujitsu and talk of Sony selling off its TV business, while Panasonic has discontinued plasma, as bad signs for an already battered industry. For specialty retailers to survive today, “You have to create some kind of unique experience,” he said. Glikes held up Apple as the “only retailer I see that’s alive” in an “overstored” retail environment. “Whatever magic they have we should emulate,” he said, because going to an Apple store “is an experience.” There has to be “some theater involved” in the retail experience, but big-box retailers today instead approach retail with the philosophy “here it is, we have it,” he said. Meanwhile, many consumers are shopping online for products that come to their door instead of going to stores, he said.

According to American TV’s news release, the 989 employees affected in 11 locations were given advanced notice of the business closing, and they will be “compensated, with benefits, through the notification period, and the majority will continue employment through the closing process.” The retailer didn’t give a final date for closing.

American is filing a Wisconsin Statutes Chapter 128 Receivership for the protection of its creditors, it said. According to the State Bar of Wisconsin, Chapter 128 is “an old, but still little-known, alternative to bankruptcy that attorneys should explore as the first option for their clients who have more debt than they can handle, wish to repay, and need the help of a structured plan to get back on their feet.” Michael Polsky has been named as the receiver for the business, American said.

Stores were to be closed Tuesday “to mark down prices,” according to American’s website. The sale will take place at all stores to liquidate inventory of furniture, appliances and electronics, it said. American will honor gift cards during the store-closing sale and give refunds to customers who don’t want to redeem them, it said. Extended warranty policies that customers purchased remain valid and are insured through a third-party insurance company. American didn’t name the insurer and calls to the retailer for additional information were forwarded to a voice mail box that was not taking new messages.

American TV customers with open orders waiting for delivery will either receive delivery of their goods or a refund of their deposit, the retailer said. All products in the retailer’s service center will be repaired or returned to customers prior to the company’s closing, it said.

Calls poured into the customer service center Tuesday, we found after waiting on hold for more than 15 minutes to speak to a rep. A recorded menu referred to the company’s installation services, but the customer service rep told us that the company is no longer doing installations.

All sales are “as is,” the customer rep told us, and free delivery and setup are no longer part of sales bundles. The best value now for consumers shopping for a TV is “to pick it up yourself,” he told us. “You'll probably find the price pretty attractive,” he said. Delivery fees, once free, are $100. When we asked about repair of any products purchased during the going-out-of-business sale, the rep told us to check warranties carefully and to contact the manufacturer if a product needs repair.