Consumer electronics retailer Tweeter Home Entertainment Group Inc. said Thursday it would close 49 of its 153 U.S. stores, just weeks after two competitors made similar moves.
Tweeter will lay off about 640 people -- 20 percent of its workforce -- and withdraw completely from Alabama, California, New York, Tennessee and most of Georgia. The move will cut its expected revenue from US$735 million in 2006 to $555 million per year in the future, but will make the company much more profitable, company President Joe McGuire said in a release.
Tweeter defines itself as a high-end retailer of home-electronics products, stocking its shelves with products from specialty audio vendors as well as big names like Apple Inc., Samsung Electronics Co. Ltd. and Toshiba Corp. But its revenues have dropped steadily from a high of $796 million in 2003.
In February, Tweeter reported that its first-quarter profits had tumbled to $2.3 million from $14.7 million for the same period last year. McGuire said the company had suffered from intense competition in the television market, selling 33 percent fewer projection TV sets and recording a 17 percent drop in their selling prices.
Tweeter's rivals have also hit rough times. In February, CompUSA Inc. announced it would close more than half of its 225 stores in the U.S. and Puerto Rico, and Circuit City Stores Inc. said it would close 69 shops worldwide. All three are victims of pricing pressure from enormous competitors Target Corp. and Wal-Mart Stores Inc., according to a recent study by IBM Corp.