Tweeter Group Reports Record Sales for 4th Quarter

The ultra-High End may be stagnant in some areas, but the rebound in mainstream consumer electronics is visible everywhere. Canton, Massachusetts-based Tweeter Home Entertainment Group has announced record results for the quarter ended September 30, 1999: an increase of 39.5%, or $74.6 million compared to $53.5 million in the same period last year. The results are similar to those posted recently by nationwide electronics chain Best Buy, which also had a record quarter. Tweeter's comparable store sales increased 5.2%, not counting results from the recently acquired Home Entertainment and DOW Stereo/Video chains.

Everything's coming up roses for Tweeter, which for the past three years has been on an aggressive takeover campaign, acquiring stores outside its native New England in the mid-Atlantic states, Georgia, Texas, and southern California. For the 12 months ended September 30, 1999, total revenues increased 22%, to $283.3 million from $232.3 million for the same period last year.

Tweeter Group president Jeffrey Stone said he was pleased with the year's totals, attributing the increase to a growing wave of consumer interest in new technology. "Our margins were strong for the period as a result of a well-balanced product mix and continuing high margins from new-technology products," Stone said, noting that the surge forward wasn't uniform throughout the company. "Our Atlanta operation posted flat sales for the quarter, buoyed by a strong September. We have recently moved the director of New England sales to Atlanta to head up the sales effort there, and we are confident that this and other changes will have a positive effect on the top-line performance in Atlanta. The bottom-line performance of this region continues to be strong."

Stone mentioned that he is also pleased with the group's most recent acquisition, Dow Stereo/Video of San Diego, which he said is "performing to plan." The company plans to overhaul Dow's product mix, including abandoning entry-level products. Digital is the big sales motivator in consumer electronics these days, according to Tweeter's chief financial officer, Joe McGuire: "Sales of digital products continued to drive our business in the fourth quarter . . . the DVD category was up 53% in dollars year over year for the quarter."

The Tweeter Home Entertainment Group opened its 73rd store in July, in Philadelphia: a Bryn Mawr Stereo & Video outlet. In September, Tweeter acquired its largest custom home-electronics subcontractor in the mid-Atlantic states, Electronic Environments, Inc. "This is part of our strategy to become a larger force in the custom home-installation business for home theater and home automation," McGuire explained.