ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, December 31, 1996 TAG: 9612310139
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
DATELINE: DALLAS
SOURCE: Associated Press
Conceding defeat for the splashy, large-format concept it launched four years ago, Tandy Corp. is selling off or closing all 17 of its Incredible Universe consumer electronics stores.
Tandy, which announced the move Monday, said retailing has become more competitive since the first two stores opened in 1992. Other chains have advertised more heavily and cut profit margins, making the 184,000-square-foot stores too expensive.
``Our customers liked us, but we needed more of them,'' said Tandy spokesman Martin Moad. ``Incredible Universe has a lot of positives to it, but when you really get down to it, it's really not making any money.''
Weak Christmas sales helped trigger the decision, which came as little surprise to Wall Street. Tandy shares were up 75 cents to close at $46.25 on the New York Stock Exchange.
Nearly 5,000 employees work at the affected stores. Some will lose their jobs over a six-month transition period, said Ron Trumbla, another Tandy spokesman. The company offered no specific number.
Analysts praised the move and said the generally weak consumer electronics market had proved fatal to a retailer that couldn't generate enough sales to cover high overhead.
``We don't think they were getting the high-end customer they needed,'' said George Sutton, analyst with Rauscher Pierce Refsnes in Dallas. ``They weren't selling the $5,000 televisions. The appliance segment was never really successful. People weren't going in and buying refrigerators, washers and dryers.''
Sutton blamed poor sales partly on the chain's no-commission policy for salespeople as well as merchandise and inventory problems.
When Tandy unveiled its first two Incredible Universe stores in Arlington, Texas, and Portland, Ore., it promised to wow customers with size, selection, ambience and low prices.
Each location stocks more than 85,000 items in more than five times the space of a typical Circuit City Stores Inc. superstore, which has about 33,000 square feet..
Customer traffic and sales were strong at first. But in May, Tandy announced that it would close two stores and eliminate about 320 jobs at the remaining 17 stores.
Tandy said it will continue to expand its core Radio Shack business. That chain consists of about 6,800 stores worldwide.
LENGTH: Medium: 52 linesby CNB