Electronic Expo betting on smaller stores [The Record (Hackensack, N.J.)]By Joan Verdon, The Record (Hackensack, N.J.)McClatchy-Tribune Information Services
Dec. 01----Electronics Expo CEO says downsizing is the key to survival.
Since its founding 10 years ago, Electronics Expo has been known in the consumer electronics industry for dramatic growth. Now, the company's founder is saying the key to its survival is to shrink, and think smaller.
The electronics chain has closed five of the eight stores it had at its peak, including the 18,000-square-foot store on Route 17 in Paramus, which went out of business after a final Black Friday sale. The company's founder, Leon Temiz, said Friday he plans to reinvent Electronics Expo as a chain of smaller, 4,000-square-foot, service-oriented stores, and specialize in custom installations as well as commercial installations for restaurants and offices. The company intends to open some of the smaller stores next year, including in Paramus, he said.
"We're going two steps back, to go three steps forward," Temiz said in an interview in the company's headquarters in Wayne. "To do that, you start with the stores."
The company let its leases expire on its rented stores in Paramus, Woodbridge, East Brunswick, Raritan and Succasunna and is keeping the company-owned stores in Union Township and on Route 46 in Wayne, as well as a clearance store in the corporate headquarters building on Demarest Drive in Wayne.
Electronics Expo is struggling with the same challenges facing consumer electronics chain Best Buy, whose sales have plunged in recent years, and has announced it is switching to smaller stores, and not building any more of the superstores it was famous for.
Alan Wolf, senior editor at TWICE, a leading industry trade publication, said Electronics Expo's new strategy sounds like the right move. "It's something a lot of audio-video specialists like Leon are doing around the country," Wolf said. "You want to diversify your customer base by going after commercial installations, rather than just home. The nature of the business is changing. You don't need big stores anymore. You can put all your assortment online, and just keep a few key things in the stores," he said.
Temiz said the company's sales took a hit when he closed the stores, but in the future, profit will be more important than high sales volume. "If we can become more efficient and focus on a certain market, that's what we're trying to do," he said. Temiz said the company does not disclose annual sales.
Temiz said Electronics Expo employees will do in-home consultations, and will help homeowners network their homes to be able to use their smart phones and tablets to do things such as close the garage door remotely, or see who is at the front door.
Electronics Expo has a creative director who designs residential and commercial buildouts, as well as several home theater specialists. The company has 60 employees.
Electronics Expo will continue to sell products online, but its smaller stores will be stocked with the major, or better brands, such as Sony, Samsung and Panasonic, Temiz said.
Howard Davidowitz, chairman of New York-based national retail consulting and investment banking firm Davidowitz & Associates, said Temiz is facing challenges that have felled chains like Circuit City, Tweeter and Ultimate Electronics, and that are bleeding Best Buy.
"This is a very tough battle," Davidowitz said. "There's a lot of independents who are very creative, and some of them will make it," he said, noting that while the Internet and Amazon killed off several bookstore chains, there still are many thriving independent bookstores.
Email: email@example.com. Twitter: @JoanVerdon
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