Is Syntax-Brillian's Wal-Mart Partnership Good for Sales?

By Superbowl Sunday, Syntax-Brillian (BRLC) will be on the shelves at Sam's Club, Wal-Mart (WMT) and Best Buy (BBY) in addition to their long-time customers like Circuit City (CC), Target (TGT), Sears (SHLD), KMart, Costco (COST) and BJ's Wholesale (BJ). In my opinion, getting into Best Buy is a big plus for BRLC as it is the better of the two retail electronic giants, Circuit City being the other. While I like Circuit City, I think Best Buy has simply outperformed them and has a larger and more loyal customer base.

But, really, the big question is whether or not adding Wal-Mart and Sam's Club, as customers, is a good thing for Syntax-Brillian? I am not a big fan of Wal-Mart in general as I think they engage in unsavory practices with their suppliers. Sure, business is business but at what cost to the overall economy? So, that sounds bad for BRLC, right?

Well, not quite. It adds exposure for BRLC in their attempt to become a tier 1 TV supplier. As opposed to what you may have heard elsewhere, Wal-Mart and Sam's Club do not just sell lower-end products from tier 2 and tier 3 suppliers like Westinghouse, Polaroid, Funai, Emerson and Visio. They also sell TVs from tier one suppliers like Sony (SNE), Phillips (PHG), Samsung, Toshiba (TOSBF.PK) and JVC.

Wal-Mart and Sam's Club sell a lot of TVs and, as pointed out in one article published recently, "with their wallets depleted, consumers might choose to buy the sets from discount stores such as Wal-Mart." Selling in Wal-Mart and Sam's Club will put Syntax-Brillian TVs in more homes and make it a "household" name. That, in addition to recently won awards and their marketing strategy with ESPN, will increase demand for Olevia TVs and that, in turn, will allow Syntax-Brillian to charge a price that will allow for margins to remain strong.

Where some companies get hurt is when Wal-Mart becomes a large and/or the only source of demand for their products. Then Wal-Mart uses that as leverage to drive the price down. So long as Syntax-Brillian continues to sell to other U.S. retailers like Target, Circuit City, Best Buy, Kmart and Sears, there is little danger in that happening.

Also, there are still the sales in China through their distributor there as well as sales in Europe through Vivitar. Syntax-Brillian is in a position to use Wal-Mart as a means to an end and the end point is to become tier 1 TV supplier.

Disclosure: Author is long BRLC

Comments

[tperry1962:]

This LAZER guy has absolutly "NO" idead what he's talking about. He's just another pumper trying to sucker people into buying this junk stock.

He provided NO information pertaining to Olevia TV's being in sold in Best Buy stores by Super Bowl. He also stated that the TV's were being sold in COSTCO presently, this is also untrue.

Mr. Lazer, I suggest you get your facts(and spelling)correct before posting. You are doing real BRLC share holders harm by posting "FALSE AND MISLEADING INFORMATION"!

2008 Jan 14 09:04 AM

[Observer4113:]

You should talk about spelling; what’s an "idead"? Also, "TV's" with an apostrophe is possessive, not plural. And, just to nitpik, shareholder is one word.

2008 Jan 14 12:14 PM

[Loren Paz:]

"By Superbowl Sunday, Syntax-Brillian (BRLC) will be on the shelves at Sam's Club, Wal-Mart (WMT) and Best Buy (BBY)"

How do you know they will be on shelves of all those stores by Superbowl Sunday? Do you have access to insider information?

2008 Jan 14 02:26 PM

[retrobeast:]

Excellent article. Smart money is going into BRLC as this stock triples in the next 2 quarters. Those bashing lost money by buying high and are upset

2008 Jan 14 03:33 PM

[Larry Lazer:]

Uh, no, I don't have insider information.

According to this article:

seekingalpha.com/artic...

According to this articel, the CEO himself said that they would be on the shelves in Best Buy by the Super Bowl and he said it in a conference call on November 8th, 2007.

According to the Olevia website:

www.olevia.com/en-us/W...

Costco is listed as a customer.

According to multiple claims on the Yahoo boards, there have been sightings of Olevia TVs in both Walmart and Sam's Club stores already.

You guys seem upset. Good!

2008 Jan 14 04:15 PM

[BRLC Fan:]

You go, Larry!

2008 Jan 14 04:34 PM

[Loren Paz:]

I see. However, you should expand more on your claims.

The CEO did say they would be in Best Buy "in time" for the SuperBowl. I guess their "in time" defintion is different from what I'm reading. I read "in time" as being there weeks before the superbowl began and before the NFL playoffs started they can take advantage of those sales. I guess he meant that it'll be there before SuperBowl Sunday. There use to be a 42" Olevia tv on bestbuy's main website but isn't there anymore. There's still three weeks before the SuperBowl so we'll see.

Yes Costco is one of their customers but they only carry the 65" LCD TV and nothing else. That 65" Olevia tv use to be on CostCo's website but isn't there anymore either.

As for Sam's Club, they are selling the 65" Olevia LCD too but I do not believe they have any other SKUs at the moment. I personally did not see any Olevias at my Wal-Mart when I went shopping over the weekend but i'll take your word they are there in some Wal-Mart stores. This doesn't mean they well be availible in all Wal-Mart stores nationwide by the time the SuperBowl starts. They could be using stores in some regions as test markets.

Anyway I read your statement as you know that a wide range of Olevia SKUs will be availible in all those retailers to take advantage of Super Bowl TV sales and hence I thought you had insider information.

2008 Jan 14 04:41 PM

[P. Vemireddy:]

Based on retailer's web sites on 2/20/08

These are the number of models of Olevia brand TVs offered for sale.
Wal-Mart: 0
Circuit City: 0
Best Buy: 0
Sam's Club: 1 (65")
Costco: 1 (55")

Doesn't look too good. I think the "pumper" charge is an accurate one.

2008 Feb 20 11:44 PM