Retailers question Wiz buy; Cablevision ripped for lacking retail expertise.
Cablevision's cable business is already feeling the heat. According to published reports, P.C. Richard & Son has pulled its advertising from Cablevision in response to The Wiz acquisition.
Intercounty Appliance Corp., a Northeast buying group composed of small, independent consumer electronics dealers, is advising its New York-area members to cancel their Cablevision advertising plans.
"How we can we support cablevision in advertising when they are a competitor?" asked Bob Stevens, an Intercounty vice president and owner of Bob Stevens Appliances & TV, in Westhampton Beach, N.Y.
Cablevision plans to use the Wiz stores to sell a variety of digital products and services, as well as tickets to sporting events and entertainment shows (Cablevision owns Madison Square Garden and Radio City Music Hall).
"I don't understand the logic," commented Leon Temiz, chief executive of Sixth Avenue Electronics, a four-store consumer-electronics chain based in Springfield, N.J. "Sell tickets? That's why you have Ticketron. Pay cable bills? It is easier for me to pay by mail."
But it is Cablevision's dearth of retailing experience that is drawing the lion's share of criticism.
"I don't see Cablevision as having the necessary expertise in retailing," commented Greg Mansley, owner of Granado Appliance, Valley Stream, N.Y., and an Intercounty Appliance Corp. director. "I don't see where the marriage fits. Where will they get the management personnel to turn the Wiz around?"
"Our business is a knee-jerk-reaction business," said Stevens. "You have to have some forte in dealing with this business. You can't look at it every six months."
One retail executive for a Northeast chain said that he believes the Wiz will be back on the market within a year because of Cablevision's lack of expertise. "A company that has no retail experience has bought an entity with no infrastructure."
Officials from Cablevision did not return phone calls for comment.
Retailers and analysts pointed out a series of challenges Cablevision faces in resurrecting The Wiz.
Bruce Leichtman, director of media and entertainment strategies for research firm The Yankee Group, Boston, said he would be surprised if The Wiz continued to sell direct-broadcast satellite products, given the competitive nature between cable and satellite.
"Like any merchandiser, they have a right not to put it on the shelf," he said.
"What it comes down to is, what makes best sense for the whole company," he said. "As the head of The Wiz, you'd want to sell DBS. But at the higher level, within Cablevision Inc., it may not make sense."
Despite retailers' comments, Bob Marcantonio, a vice president for research firm Levin Consulting, Beachwood, Ohio, sees potential in Cablevision's venture.
"The Wiz chain has done an effective job of branding and has key relationships with some vendors," he said, adding that these vendors know "Cablevision has deep pockets.
"And this gives them a way to showcase high-speed modems and other products," he said. "These types of products haven't been displayed well at retail."
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|Title Annotation:||Nobody Beats The Wiz|
|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Feb 16, 1998|
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