Tweeter unveils new concept store
As Tweeter looks to rebound in its post-bankruptcy era, the company is staking its prospects on a new concept store with a hands-on theme.
The prototype store, which reopened in the new format on Thursday at 805 Providence Highway, is a departure from the “Consumer Electronics playground” stores that Tweeter previously had embraced as its next-generation format. Debuting in 2006, those stores placed components in a showroom set up to resemble different rooms within a home.
But the playground stores were expensive to build and relied primarily on salespeople to educate customers about products, Tweeter CEO George Granoff said. The Dedham store automates much of that process.
“This store really stands much more on its own and allows the customer to educate themselves and experience the unique qualities of the merchandise we sell,” Granoff said.
Customers press buttons labeled “try me” at displays that demonstrate the potential of high-end audio and video components.
In the “Video Challenge” room, scenes play simultaneously on seven plasma and LCD TV models. Customers can change scenes to compare how each TV stacks up against the others in displaying color, definition and contrast.
Another display promotes the Vudu on-demand video player, which enables viewers to download more than 5,000 movie titles.
Capturing the business of early-adopter consumers is important for Tweeter as it attempts to differentiate itself from mass merchandisers.
Rather than try to match discounters such as Best Buy on prices, Tweeter has concentrated on the high end of the consumer electronics market.
“We look to sell the highest-performing products available from the brand leaders in the industry,” Granoff said.
Tweeter emerged from Chapter 11 bankruptcy protection last July when it was purchased by Schultze Asset Management for $38 million. Granoff, a former president of the Ames department store chain, was brought in to run the company following the resignation of CEO Joseph McGuire.
Granoff said cutting overhead was his first priority at Tweeter. He laid off 80 of 160 employees at the company’s Canton headquarters. The company has consolidated seven warehouses totaling 500,000 square feet into five with 200,000 square feet. Tweeter is closing its Canton warehouse, located next to the headquarters on Pequot Way, this month, eliminating 30 jobs.
A revamp of the supply chain enabled Tweeter to cut its inventory supply in half to eight weeks, reducing the need for warehouse space, Granoff said. The cutbacks are saving the company $10 million a year.
Tweeter shut down its e-commerce site, which was being operated by a third-party vendor and was not profitable, last summer. Granoff said there are plans to bring back the site under Tweeter’s operation, but he did not have a date for the launch.
Granoff, a 62-year-old Sherborn resident, said all of Tweeter’s remaining 94 stores are profitable, and revenues are comparable with last year’s. Tweeter will evaluate the success of the Dedham store before deciding whether to expand the concept.
“The company’s continued to improve and we’re very excited about our prospects for back-to-school and the fourth quarter,” he said.
An analyst was skeptical about whether the new prototype store can overcome Tweeter’s competitive problems.
Tweeter’s product mix is very good, said Erik Haruki, a research director for IDC, but Haruki said he doesn’t see the new concept as a radical departure from Tweeter’s previous model.
“It still comes back to selling premium goods at a premium price to a limited potential customer base: the price-no-object buyer that values time and convenience over price,” Haruki said. “The average consumer might be wowed by the set-ups but will shake his head, chuckling out the door at the solutions’ costs.”
Steve Adams may be reached at firstname.lastname@example.org.