Trans World CEO: Blu-ray to Drive Holiday Video Sales18 Nov, 2010 By: Erik Gruenwedel
As the self-described “last man standing” selling only entertainment at the national retail level, Trans World Entertainment founder and CEO Bob Higgins said he expects Blu-ray movies to drive video sales through the winter holidays.
Albany, N.Y.-based Trans World operates 533 entertainment retail stores nationwide and related websites under the f.y.e., Suncoast and Second Spin brand names.
Trans World reported a 2% same-store sales decline in disc sales in the third quarter (ended Oct. 30), compared with an 11% decline industry-wide.
Higgins said that with big box stores downsizing shelf space for packaged media, there exists “a great opportunity” to grab market share and increased physical business. Indeed, video represented 44% of the company’s business, up from 41% during the prior-year period.
“We have to have the right value for of the consumer,” Higgins said in a call with analysts.
Trans World reported a third quarter (ended Oct. 30) net loss of $16.1 million, compared with a net loss of $22.3 million during the prior-year period. Same-store sales (open at least 12 months) fell 5%, while total revenue fell 20% to nearly $129 million, compared with $161.4 million last year. It operated 23% (161) fewer stores in the quarter.
Characterized by one analyst as operating a “melting ice cube of a business strategy,” Higgins said the company would continue to explore digital opportunities while maintaining a tight lid on expenses. Indeed, with more than 300 store leases up for renewal, Higgins said each location must generate a “reasonable” operating profit to justify keeping the doors open. He said landlords have been proactive in reconfiguring store leases to better reflect the economic climate.
The CEO said he is assessing packaged media retail landscape’s future “a year or two” at a time.
“In this business, four or five years [into the future] … is a tough question to answer and I’d just be giving you probably a bullshit answer, if I answered it,” Higgins said.