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Tweeter feels the pinch from larger retailers


Tweeter is an audio/video retailer that opened its first store in 1972. They started off in the New England area and have since spread nationwide offering 153 retail locations. That number will soon drop by one-third with the announcement that 49 stores and two regional facilities will be closed.

The company will close all of its stores in Alabama, California, New York and Tennessee and will reduce its store count in the remaining states that it has a presence in. As a result of the closings, 650 of its 3,100 employees will lose their jobs. The cutbacks will reduce Tweeter's annual revenue from $735 million USD to $556 million USD while the store closings will result in a charge of $50 - $60 million USD.

"As we continue to face the challenges of our ever-changing industry, we do so with a renewed focus on the future of our brand and on our ability to deliver the ultimate consumer electronics shopping experience," said Tweeter CEO Joe McGuire.

The remaining stores will feature Consumer Electronics Playgrounds to better compete with its retail competition. "Since our Playground stores are clearly resonating with consumers and articulate our vision so well, we will continue to execute this concept in our remaining 97 traditional stores by taking what we have learned from our current Playground stores and rolling it into our existing fleet," McGuire continued.

Many analysts believe that Tweeter has just not been competitive on pricing compared to its larger rivals -- especially when it comes to popular HDTVs. Stores like Wal-Mart, Circuit City and Best Buy have been slashing prices on their televisions while Tweeter has held prices closer to the MSRP.

"This holiday season was so brutal, with everyone from Wal-Mart to Best Buy to Costco really, really aggressively discounting their TVs," said Eric Haruki of IDC Technology. "It was really no surprise... They do offer high-end stuff, but these guys are completely non-flexible with their price points."

You can consult the following press release for the full list of store closings.

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