Good Guys fashions new Expo

Discount Store News, Sept 15, 1997 by Robert Scally

LOS ANGELES -- The Good guys consumer electronics chain is trying to add both fashion and passion to the moribund business of CE retailing with its new Exposition format, which was officially unveiled late last month at the chain's newly remodeled Beverly Hills location.

The 76-store San Francisco-based The Good Guys chain has been testing the new Exposition format at a location in Redondo Beach, Calif., in southern Los Angeles County since March, but the Beverly Hills store represents the start of a chainwide conversion to the new format.

The chain, which operates in California, Washington, Oregon and Nevada, halted all new store construction in 1996 in favor of converting its existing locations to the new Exposition format.

The Good Guys, which is suffering the effects of the torpid pace of CE sales during the past few years, hopes to convert about eight locations to the Expo format during calender 1998, said Brad Bramy, vp of advertising for The Good Guys. "We want to do as many stores as we can," Bramy told DSN.

The pace of conversions to the new format is likely to accelerate during the next few years, Bramy said.

The chain will attempt to speed the conversion process by occasionally moving stores to nearby locations to avoid shutting down locations for the 90 days it takes to make the necessary changes.

"We have permission from our board to convert as many stores as we can afford," Bramy said.

The chain also plans to incorporate elements of the Exposition format into the two new WOW! joint venture superstores it plans to build in the Los Angeles area in conjunction with the Tower Records/Video chain, Bramy said.

The Good Guys, along with several other CE chains, desperately needs to change its fortunes. The flagging pace of CE sales is reflected in The Good Guys' most recent financial results.

The chain recorded a net loss of $4.1 million for its third fiscal quarter ended June 30, 1997, compared to a net loss of $3.4 million for the same period last year. Sales for the third quarter of fiscal 1997 were $194.8 million, down 1% from $196.6 million in the third quarter of fiscal 1996.

Comparable store sales for the quarter decreased 3% from 1996 levels.

Fro the first nine months of fiscal 1997, the net loss was $5.5 million, compared to income of $3.6 million for the same period last year. Sales for the first three quarters of fiscal 1997 were $686.5 million, a 4% decrease from the $713.7 million reported last year.

Comparable store sales decreased 9% from 1996 levels during the first nine months of the fiscal year.

The idea behind the Exposition format is to showcase today's converging digital technologies while making shopping a less threatening, more inviting process for consumers who, in the past, have said they do not enjoy the experience of shopping for CE products.

With blond wood floors, brushed stainless steel architectural accents and light colors used throughout the store, the Beverly Hills Exposition store is brighter than CE stores of the past, including The Good Guys' existing format.

The Exposition's look evolved from the Good Guys' collaboration with Richard Altuna a retail space designer who has worked for Williams-Sonoma, Pottery Barn, Estee Lauder's Origins stores, The Nature Stores and Imaginarium. The Exposition design sprang from Altuna's fascination with the 1939 New York World's Fair Exposition, which feature futuristic new technology.

The Good Guys is borrowing elements from apparel merchandising to put more excitement into CE sales, Bramy said.

"We'll change things often so the store has pulse," Bramy added.

Jayne Spiegelman has been named senior vp of merchandising, in a move that marks the chain's new approach to CE merchandising. Spiegelman joins the company from Andersen Consulting.

Prior to working for Andersen Consulting, Spiegelman spent 17 years at Federated Department Stores and Macy's West where she held a variety of senior merchandising management positions, including president of women's merchandising at Macy's.

The main departure from the current generation of CE stores is the addition of four Expo rooms located like spokes around a central sales hub. The rooms are an innovative merchandising concept designed to present the latest digital CE gear in environments that are more like the consumer's home or work space.

The rooms have large glass windows, which begin about four feet above the floor and extend to the ceiling. The rooms are open and have more than one entrance and exit, but can be closed off if a customer wants to crank up the volume.

One of the main changes from the original Redondo Exposition store to the new Beverly Hills prototype was in the configuration of the Expo rooms, Bramy said.

"The difference [originally] were too subtle for consumers to pick up on," Bramy said. "They either saw the room from the outside or they didn't pick up on the difference between them."

The Expo rooms are now clearly marked with a high-end room, a family media center, a work-at-home room and a room that demonstrates multi-room sound systems.