When a spokesman for the publicly traded company was asked to comment on the hiring of brokers to market their leases in the Northwest and elsewhere, he conferred with higher-ups and called back with this official statement: "As part of our ongoing management strategy, we are reviewing out real estate portfolio. It's well known that some of our stores aren't profitable, but I can assure you that no decision has been made regarding store closures."
That may be true, but likely only because the company hasn't found someone else to cover the rent. According to information given to brokers by the agents Good Guys hired to market the Northwest leaseholds, The Good Guys has said it plans to operate each location "until a new tenant can be found," and that brokers touring the properties with their clients should be discrete because "employees are unaware the locations are being marketed."
Employees are likely not unaware, however, of how poorly the company is doing, as it is public record. The specialty retailer of higher-end consumer entertainment electronics last week announced a 6% decline in same-store sales for the third quarter and an $8.1 million loss. Through the first nine months of its fiscal year, the company has lost $22.7 million on revenue of $560.5 million.
Good Guys entered its current fiscal year with a business plan in place that would enable it to be profitable with flat annual sales growth. In early August, the company revised its timeline for returning to profitability to reflect the economic downturn and the industry-wide softening in demand for consumer electronics, and predicted its same-store sales would be off only between 2% and 4%.
"Sales to date in December have been slightly below expectations, but it is still too early to project how December will close. Certainly our performance over the next 70 days will determine whether we are able to improve over last year's results, and we will continue to do all in our power to make that a reality," said company President Kenneth R. Weller last week.
What stores are kept in the Northwest may end up with a distinctly new look. Earlier this month, the company unveiled a new store design in Los Angeles that will serve as a prototype for future remodels. The new store design was developed in conjunction with WinnTech Digital Systems, Inc., a supplier of design solutions, interactivity, hardware and fixtures to consumer electronics retailers and manufacturers of high-end audio products.
The brokers involved in marketing the properties--Michael Heerman of HSM Pacific in Portland and Nitya Nadesan of Seattle Pacific Realty did not return calls from GlobeSt.com seeking comment, possibly because they signed confidentiality agreements. Four of the five locations in Portland are being marketed along with six of the nine stores in Washington.
Most of the locations being marketed for sublease are around 20,000 sf. The only Portland property not being marketed for sublease is the one in Tigard. The three Washington locations omitted from the sublease list include Bellevue, Lynwood and Southcenter.
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