Tweeter Home Entertainment said this morning it plans to close 49 of its 153 stores and cut about 20% of its staff in an effort to consolidate and reinvest its resources. The stores to be closed were expected to lose money over the next six months. Revenue is expected to drop from $735 million to $555 million, and the company forecasted $50-60 million in closure related charges, mainly non-cash. Electronics retailers have been hurt by contracting margins resulting from price-slashing on popular items like plasma screens and flat-screen TV sets. It said it would expand on its Consumer El electronics [CE] Playground concept stores, which it says have been well-received. Tweeter said it would roll out its Tweeter Design Studio software suite in April, which its says will enable Tweeter's sales associates to give a very polished proposal to a customer in a fraction of the time it takes today. In pre-market trading, shares are up 4.5% to $1.40.
Sources: Press Release, MarketWatch
Commentary: Tweeter Misses Earnings on Weak TV Panel Revenues -- Best Buy and Circuit City Should Follow Suit • LCD Prices to Fall Less Flat than Last Year • LCD Panel Evolution: Revenue Strong Despite Falling Prices
Stocks/ETFs to watch: Tweeter Home Entertainment Group Inc. (TWTR). Competitors: Circuit City Stores Inc. (CC), Best Buy Co. Inc. (BBY). ETFs: Consumer Discretionary SPDR ETF (XLY), PowerShares Dynamic Consumer Discretionary (PEZ), Vanguard Consumer Discretionary VIPERs (VCR)
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