MyerEmco Chief Blames Video Vendor Policies for Downfall
TV vendors squeezing credit and a bank unwilling to extend its loans ended MyerEmco’s 55-year run as a Baltimore-Washington area retailer, President Jon Myer told us in an interview Friday.
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The seven-store chain’s revenue plunged 35 percent last year, with a 40 percent drop in average selling price for TVs, which accounted for 50 percent of MyerEmco’s sales, Myer said. The sales downturn was exacerbated by video suppliers enforcing 30-day payment terms, but not making good on trailing credits for upwards of 60 days, Myer said. MyerEmco’s bank, which Myer declined to identify, also refused to extend credit, forcing the chain to start liquidation sales that began Friday and will run for 60 days, he said. “Unfortunately, our greatest sale ever will be our last,” read a newly posted message on the MyerEmco website Friday. “It’s sad but true. After 55 years of serving the Washington area community, MyerEmco Audio Video will be closing its doors forever. As a family-operated business,we've outlasted many high-profile competitors, but we couldn’t outlast this Great Recession."
"The video vendors squeezed us credit-wise before it was warranted,” Myer said. As a result, MyerEmco financed vendors as it sought to track trailing credits, the extended payments of which “absolutely crippled” the chain, Myer said. Audio suppliers were more willing to extend terms and “work with us,” he said.
The chain restructured last year, cutting its workforce to 100 from 145 and closed stores in Bowie and Gaithersburg, Md. Former President Gary Yacoubian also left the chain last year and was replaced by Myer. Myer also put a home up for sale to put the proceeds into the business. Other executives, including David Glassman, left to form Fairfax, Va.-based IQ Home Entertainment.
MyerEmco peaked with revenue of $39 million in 2006 during strong sales of flat-panel TVs in a growing housing market. Revenue fell to $35 million in 2008 and as the housing market crashed so did MyerEmco’s installation business, which accounted for 50 percent of its annual revenue, Myer said. The chain had a contract to handle CE installations for home builder NV Homes.
Myer, who is the retailer’s largest shareholder, owns the Tysons Corner, Va., store and will likely bid for the chain’s name and customer list when creditors put them up for auction, he said. While Myer is hoping to negotiate better lease terms on 3-4 locations, he said he will focus on closing the down the business and paying off creditors for the next 60 days. MyerEmco is hoping to complete the liquidation sale without filing for bankruptcy, but the final decision is with creditors, Myer said.
Whether Myer would return with a multi-store specialty chain remains open. “It’s a question of whether a specialty chain can survive in the current market,” Myer said. A one- or two-store retailer “might have a better chance of survival” in the current economic environment, he said. “As we grew from 3 to 10 stores it was hard to keep the culture,” Myer said.
It also remains to be seen whether customers, many accustomed to shopping prices on the Internet, are willing to pay for the added service that MyerEmco’s commissioned sales staff provided, Myer said. “Customers are less willing to pay for the service,” Myer said. The trend began with emergence of the Internet as a retail force but picked up speed during the past nine months, Myer said.