P.C. Richard Hosts 100th Anniv. Gala

By Alan Wolf -- TWICE, 10/26/2009

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Conn's Says Tex. Economy Is Hurting Biz

NEW YORK — P.C. Richard & Son celebrated its 100th anniversary this month with 1,000 of its closest friends.

Vendors, family members and assorted guests filled a ballroom at Manhattan's Marriott Marquis to mark the milestone with the nation's largest privately held CE and appliance chain, and to support the charitable P.C. Richard & Son Foundation.

The $2,000-a-plate dinner drew a who's who of industry leaders, as well as musician Jon Bon Jovi who gave a private performance for the fundraiser.

In prepared remarks, president Gregg Richard, great-grandson of founder Peter Christiaan Richard, thanked his vendors, his employees and most of all his customers for their support, “without whom we wouldn't be here tonight.”

Richard said the company was already six days into its second century and has never been better positioned. So far this year the $1.5 billion business has added six stores — all former Circuit City locations — and is about to open a seventh in Princeton, N.J., which will bring the store count to 57.

In addition, every existent store was completely remodeled in four months to present a larger assortment of TVs and gaming products, and to provide live, interactive PC and digital imaging displays.

Training has also been stepped up for staffers, Richard said.

“We've invested in the business at a time when most companies were pulling back,” he noted.

Richard credited his father, CEO Gary Richard, with taking the company “to heights unimaginable” to second-generation family head Alfred “A.J.” Richard.

“We don't sell boxes,” Gary Richard explained. “We sell benefits and features. And we deliver, install and service what we sell. When you're standing in front of the product, we're standing behind it. We're your daddy.”

The company began as a Brooklyn hardware store opened in 1909 by Dutch immigrant Peter Christiaan — the P.C. in P.C. Richard. His son A.J. added radios and appliances to the mix, and service and trucking operations to support them, while grandsons Gary and Peter Richard led the metro area expansion that built the company into a regional powerhouse.

More recently, great-grandson Gregg laid the groundwork for a major expansion in New Jersey with the opening earlier this year of a 325,000-square-foot complex housing a regional headquarters, a distribution center, and training and service facilities. The new development complements the Richards' main 650,000-square-foot warehouse and corporate headquarters in Farmingdale, Long Island.

Conn's Says Tex. Economy Is Hurting Biz

BY ALAN WOLF

Beaumont, Texas — Conn's said growing unemployment in its home state of Texas has slowed sales and increased delinquencies for its in-house credit business, which may lead to an earnings loss for the current quarter, ended Oct. 31.

The multiregional appliance and electronics chain said earnings are also being squeezed by continued margin pressure. Product gross margins were down about 110 basis points during the first two months of the quarter, it reported, compelling the company to boost margins and cut expenses.

Conn's is currently testing a new compensation plan for sales associates that's designed to accomplish both by lowering base pay and increasing incentives, TWICE earlier reported.

Meanwhile, net sales have fallen 20 percent during the first half of October, the chain said, compared with a 1.3 percent dip for August and September.

Conn's attributed the marketplace deterioration to rising unemployment in Texas, and cited Bureau of Labor Statistics figures that showed the percentage of those out of work rising from 5.5 percent in December to 8 percent in August.

This contributed to an average net loss rate of about 4 percent within the company's credit operation during August and September, Conn's said, and the figure is expected to rise going forward. In response, the company is increasing the use of promotional credit programs for high-credit-quality customers, is raising the floor on the credit scores accepted in the portfolio, and is increasing down payment levels.

Conn's also said it is continuing to “closely monitor” its capital availability and will adjust its plans if necessary to maintain adequate liquidity and compliance with its various capital facility covenants.

As a result of the current economic conditions and its effects on the company's operating results, Conn's withdrew its previously issued earnings guidance and has decided to temporarily discontinue its practice of providing earnings projections.