Vision - September/October 2008 - (Page 9)

Henry Chiarelli’s CE Career DBL Distributing, President Gibson Audio, President CompUSA, Vice President Consumer Electronics Sony, CE Consultant RadioShack, President RadioShack.com RadioShack, Senior Vice President Computer City, Senior Vice President Consumer Electronics buying season. We want to help them stock their shelves with the best products and accessories for the holidays. 2006–Present 2005–2006 2003–2005 2001–2002 1998–2002 1970–2002 1997–1998 What was your biggest mistake? What was your best decision? You know Charles Tandy at RadioShack was really smart. He paid executives 10 percent of what their store made. The second thing he did that was really smart is he strongly encouraged us to buy stock options with our bonus. Because of that, I accumulated a nice nest egg. I retired when I was 47 because I didn’t need to work anymore. That was the biggest mistake I ever made. For about six months, it was fun. We went to Hawaii, but after a while there are just so many times that you can walk on the beach before it gets old. I got bored so I decided to go back to school at 50 and get my MBA from TCU (Texas Christian University). My MBA group was great; we had many lively debates. It was one of the most gratifying moments of my life four years ago when they let the TCU class vote on the person who most influenced the class. I was blown away when my class voted for me. After all of the debates, in the end, the “old man” had more impact than I thought. I still keep in touch with some of them. It was one of the best things I have done in my life. After that, I encouraged my kids to go to graduate school and now three (of five) of them have master’s degrees. How does the store within a store merchandising help move product? At RadioShack, the first store-in-a-store was the Sprint store. It got RadioShack into the wireless business. It was a huge point of profits. We also did the store-in-a-store concept for Microsoft, Compaq and RCA. RadioShack grew the business by compartmentalizing accessories to designated portions of the store. We also helped with retailer merchandising. We put CE in CompUSA with the home theater. We carved out a significant portion of the 25,000 square foot store. There is a halo effect found in TVs—there are four primary food groups that are attached to the sale— mounts, power, remotes and HDMI (cable). With sound, there are AVR and speakers. We are always suggesting accessories as a way to enhance the experience. targeted and this is what drives the high open rate. We have been developing our list since 2006. Basically, our list is the family jewels. What happens to unsold inventory? Sometimes you get stuck. You have to work your way through it. How do you evaluate market trends and purchase behavior? There are two main ways we keep in touch with the trends. One is we have 540 product lines. The vendors have a good feel of what is going on and they give us a good snapshot of the market. The second way is we stay engaged with our customers—the dealer community spots trends fast. For example, last year they started saying, we need accessories for gaming, especially for the Nintendo Wii. Well, today gaming accessories have become the fastest growing side of the business, particularly for the Wii. That insight came from the dealer side. We keep our dealers and vendors close and listen to our customers. We also use CEA’s market research and have participated in the annual Accessories Guide for the past few years as a sanity check to make sure the trends in the rearview mirror and those going forward are what we are seeing as well. How has the buyout of DBL affected the company? DBL was bought by Ingram Micro for $96 million last June (2007). It was their second acquisition. They also bought AVAD three years ago. Going from a private company to a public company was the biggest challenge for us with all of the financial issues and paperwork. It was a huge task. The other thing is we are now No. 1 in logistics. We are moving to two warehouses, one in Jonestown, Pennsylvania and one in Mira Loma, California. We are expanding from 100,000 to 500,000 square feet so we will have five times the space. We had outgrown our warehouse space in Scottsdale. We have struggled with our East Coast delivery times of four to five days. Now we can ship in one to two days so we can provide better service to our customers and reduce our shipping costs. We also are keeping our Scottsdale office open for marketing, sales and operations and we also service the state of Arizona, serving custom installers. With the buyout, we now have three locations. How has being a volunteer leader at CEA helped your career? For me, the most rewarding part about CEA would be the networking. I know every manufacturer, I know most retailers, I know my competition and we all get together at CEA to help to grow the industry. It is so worthwhile. I’ve been going to CES for 25 years and I’ve been participating at CEA for close to 20 years, first with the Accessories Division, then the BIL (Board of Industry Leaders) and now the EB (Executive Board). I have become an ambassador to talk about how people can get involved. CEA has made me a better leader by working with people like John Shalam, Peter Lesser and Jerry Kalov. I have had many mentors to help me along the way. Networking is the key to making some life-long friends. • September/October 2008 Do you offer customer financing? Our role is to offer credit to retailers because they need a place to buy goods but also spread the payments across the time it takes to sell the merchandise. We offer 30-day net terms. We just announced the extension of $58.5 million in credit for 2,800 current DBL customers to help these retailers continue to grow their business in to the fourth quarter www.ce.org 9 http://RadioShack.com http://www.ce.org

Table of Contents Feed for the Digital Edition of Vision - September/October 2008

Vision - September/October 2008 Contents Shapiro's Spectrum In this Issue The Economist Visionary C4 Trends Coming to a Neighborhood Near You IPv6: Connecting People and Things Israelis Spend Big on the Latest CE Devices Tech Speak Tech Policy CEA Newsline Going Global Eye on Business Market Insider Just the Stats

Vision - September/October 2008

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