News

It's a season of mixed results in the electronics industry. On April 9, Peabody, MA–based Boston Acoustics announced that it has slashed jobs due to a slow fourth quarter, reducing its workforce from 389 to 327 as a result of slowing sales. The loudspeaker manufacturer expects earnings of more than $4.2 million for the year ending March 31, a figure that puts the company in a profitable position despite a loss of close to $1 million for the final quarter.

With a fiscal year that also closed March 31, Kenwood Electronics' US division showed both sales growth and profit, despite an overall loss for its Japanese parent company. Growth areas included mobile audio and home-theater products, including multichannel receivers priced above $1000. Kenwood Japan had global revenues of about $2.7 billion, but will report a net loss of $170 million for the year, attributed to slow sales in Europe and Japan, a weak Euro, and corporate restructuring charges. The company has unloaded its wireless telephone manufacturing operation and closed its Silicon Valley CD-ROM and PC speaker plant.

The cutbacks don't mean that Kenwood is slowing down its product development program, however. The company is putting renewed energy into car audio products, long one of its strongest lines. The new Mazda MP3 will include a complete Kenwood sound system. An alliance with Thomson SA will result in a line of Chinese-made entry-level DVD players later this year, sporting the Kenwood badge.

The company is also looking up-market, and has announced partnerships with Faroudja and Boston Acoustics to develop high-performance home electronics, including several new BA speaker designs. Kenwood's high-end "Sovereign" products, which were previewed at CES 2001, will get wider distribution this summer, according to company executives. New Sovereign receivers have multi-zone and multichannel capabilities and carry THX certification. They will retail in the $3000 price range. Other upscale products will be two DVD-A/V changers with inboard video processing by Faroudja. The 400+3-disc changer will retail at around $1500 and the 5-disc version will go for about $1200. Kenwood is also making a big push into "networked" electronics, which connect to the Internet as well as to other devices in the home.

On the retail front, California's Good Guys stores reported a 15% increase in net income for the five-month period ended February 28, to $1.3 million from $1.1 million during the same period the previous year. Net income for the entire year rose by $1.2 million. Net sales for the five-month period grew 6% to $415 million, against $391.5 million during the same period a year earlier. The odd five-month reporting period is the result of Good Guys' restructuring its fiscal year to coincide with those of other electronics retailers.

Formerly a mass-market commodities chain, in the past three years Good Guys has remade itself into an upscale retailer emphasizing home theater, high-definition video, and quality audio. The changeover came about in the wake of the return of founder Ronald A. Unkefer after a 20-year absence. "Our renewed focus on the top half of the consumer electronics market and ongoing efforts to reduce costs have allowed Good Guys to increase earnings and achieve above-average sales increases at healthy margins, even in the face of a challenging economic climate," said Unkefer, now company chairman and CEO. Unkefer's program has given Good Guys its first profitable year since 1995. The company expects a "steady increase" in sales growth over the next 12 months.

Finally, the ubiquitous and often-maligned Radio Shack reported sales growth of 8% for the month of March. The Fort Worth, TX–based retailer also showed a 9% increase for year-to-date sales. March figures show sales of $377.1 million in March 2001, compared with $348.3 million in the same month the year before. Total year-to-date sales were a whopping $1.11 billion, compared to $1.01 billion last year. Radio Shack is predicting a growth rate of 7–10% for 2001, approximately half of the 15–20% rate it predicted earlier this year.