Bankruptcy: TWICE 100 Taken Down a Notch
Submitted by advisor on Sat, 01/16/2010 - 12:18am.
Bernie’s Audio Video TV Appliance Co., a chain of 15 locations in Rhode Island, Connecticut, and Massachusetts is closing. In 2008 Bernie’s sold $63 million in consumer electronics and $53 million major appliances. Bernie’s ranked No. 80 on the TWICE CE chart and 36th on the TWICE Majap Top 100.
Bernie’s top creditor, a bank, was in for $12 million. Looking at the next 5 – 10 creditors listed in published reports, one might assume that all 200 creditors combined were in for less than $24 million total. A hairy guess. With $120 million in sales, they couldn’t service $24 million in debt?
Bernie Rosenberg sold the company in 1985 but the 2 stores were bought back in 1991 by Bernie’s son Milton. In 19 years Milton added 13 more locations, with plans for growth to “Boston and beyond”. 13 all leased locations in 19 years doesn’t seem like growth with wild abandon, but one would need to know if the growth was front loaded or evenly spaced.
From Masslive.com, comes this: "Thomas Labay of Easthampton was at the Bernie’s location in Holyoke soon after it opened Friday hoping to score a good deal on a 26-inch flat-screen television. But Labay found that Best Buy, located right down the street in the Holyoke Mall at Ingleside, had his television cheaper than the sale price at Bernie’s."
This quote conveniently fits our current cartoon.
Is this why they crashed and burned? Perhaps we're dense, but we’re just not getting it. Can someone with better insight or direct knowledge, explain why Bernie's is history?
Bernie's website
The Day
Wallowing in Old Ways ...
While I'm not familiar with Bernie's in particular, I am sure they are the victim of many of the mistakes I have mentioned times before, but one aspect comes to mind - Advertising & Loss Leaders ...
Smaller private dealers often squander their advertising on cute cable ads which don't disseminate much information, or over-utilize pre-formatted ads which are supplied by the manufacturer ... neither does much to increase foot traffic !!! The dealer CAN do something about this by defining their target demographic and customizing their print and media advertising to reach that customer ... it has to be a bi-weekly or monthly thing, or the public will tire of the same old format and ignore it ... it should be pointed, clever, and unforgettable ... like the old "Manamana" song from Sesame Street - once you hear it you can't get it out of you head !!! By doing these things, you will "imprint" your name (brand) on the consumer ...
Another area where the private dealers often fail is with something the Big Box Stores do all the time - offer "Loss Leaders" !!! I once mentioned this to a dealer and he thought I was talking about fishing !!! For a smaller dealer this may be difficult, but it HAS to be a consideration if the major competition is/are Big Box Stores, and who doesn't compete with Big Box Stores !!!
The idea is to get them in the store ... before those Marauders in the cartoon get to them - then prove why you are worthy of their business !!!
Maybe Bernie's spread themselves too thin ... lost track of their mission ... only they know in the quiet of their minds !!!