Tweeter's new HQ affords room for future growth - Brief Article - Statistical Data Included

DSN Retailing Today, Nov 5, 2001 by Laura Heller

CANTON, MASS. -- When a company doubles in size in just two short years, it doesn't take long to outgrow office space. Tweeter Home Electronics has done just that, and last month staff moved into a brand new facility built just yards away from its former home.

For the fiscal year ended Sept. 30, 1999, Tweeter had 73 stores in operation. On the same date this year, the company had increased its presence to 147 stores in 19 states, largely because of aggressive acquisitions of existing companies. Sales growth has nearly coincided with the store count increases; the company announced sales of $540 million for the most recently ended fiscal year, up from $283 million two years ago.

During this time, the corporate staff has occupied cramped offices in an aging building attached to a company warehouse. But two weeks ago, employees began moving into their new home, a state-of-the-art structure with room for staff to double in the future.

Not that Tweeter will be on a hiring spree anytime soon. Last month, the retailer announced that due to worsening economic conditions it would implement a 7% expense-cut initiative going into its new fiscal year, largely by reducing general and administrative expenses. Joe McGuire, vp and cfo, told DSN Retailing Today the company hasn't had to make any layoffs but reached this objective instead by delaying scheduled hiring of additional staff this fall.

According to spokeswoman Kate Monaghan, Tweeter has always operated its corporate offices as a lean operation housed in austere surroundings. The current staff of 150 people has remained largely the same in recent years in spite of its growth. But the new building affords room to grow in the future, provides staff with some much-needed office and conference space, as well as technological facilities that allow the company to better test and roll out system improvements chainwide.

A computer room will centralize and monitor systems for the company. "This is where we're going to run the world from," joked Roy Bertalotto, vp of new store development.

"All the computers will be hubbed into this room; this will take us wherever we want to go," he added.

A separate computer room on the second floor near the IT staff replicates store systems; allowing employees to install and test all new systems before rolling the initiatives out to individual stores. This will help alleviate operating glitches in stores, said Bertalotto.

Given Tweeter's propensity for acquiring existing retail companies, replacing and coordinating new systems is an ongoing process. In 2001 alone, the retailer acquired four-store Big Screen City in San Diego; three-store Audio Video Systems in North Carolina; and 33-store Sound Advice in Florida.

The 60,000-sq.-ft. facility can comfortably house 300 employees. With Tweeter's history of doubling in size every few years and acquisition prospects still in abundance, attaining this number may notbe very far off.