Ultimate Electronics president Randall Baumberger practically wore holes in his shoes walking around the 2006 Consumer Electronics Show in Las Vegas this month.
The annual cornucopia of new televisions, sound systems, computers and corresponding accessories offered a road map to the Ultimate executive’s attempt to navigate a new course for the Thornton-based retailer, which filed for bankruptcy a year ago.
“Our store should be like CES; it should be like the toy store,” Baumberger said. “Our consumers are willing to try new products.”
Baumberger, along with Jim Pease, Ultimate’s senior vice president of merchandising, spent time at CES engaged in at least one heated discussion to exact information from a supplier.
“If I’m a customer, I’m not going to be very happy if I’ve already paid $1,000 for your system and I have to pay another $99 for an upgrade,” Baumberger said. “We (as a retailer) have to keep customers happy and bring them back to the store.”
It’s all part of the comeback for Ultimate, which must compete in a marketplace dominated by the likes of Best Buy and Circuit City.
Hollywood Video founder Mark Wattles pulled Ultimate out of financial insolvency with $10 million a year ago. When the public company filed for bankruptcy last January, it had reported 2004 revenues of $705.7 million and a net loss of $37.7 million. Its total debt was $82.5 million.
Wattles took the company private, shuttering 30 of its 65 stores around the nation and laying off 900 employees. And after 37 years, Colorado’s 11 SoundTrack stores were renamed Ultimate Electronics, for a unified brand image. There are now 32 Ultimate stores across nine states.
Trying to offer the same types of electronics as big-box retailers hurt Ultimate, which was originally known as the place for new, high-end audiovisual technology. The new focus is on midrange to high-end products, particularly in the growing high-definition television market. The stores carry the newest TVs on the market, unavailable at Circuit City or Best Buy. The latest: a 73-inch television in the highest clarity of HDTV available – 1080P.
A lucrative market niche exists for a player such as Ultimate, according to Forrester Research.
“By focusing on a single digital experience, a solution boutique can carve out a niche as the go-to place in a local market,” Forrester analyst Ted Schadler wrote in a report. “For households making a wholesale shift to digital television or whole-house audio, a (fixed-price) solution streamlines the offering, alleviates the installation hassles, and creates opportunities to scale the business up.”
In addition to doing custom home installation of its TV and audio systems, Ultimate began carrying “theater seating” furniture last year.
Items on display at CES that will make their way into Ultimate stores this year include high-definition DVD players, video-capable MP3 players, new car-audio integration systems and a 65-inch 1080P flat- panel television.
Ultimate says its job is to pare down the thousands of tech gadgets on display at CES and figure out which products are the best for consumers.
“We know what’s out there; we know that consumers are confused,” Baumberger said. “A lot of it for us is ease of use. Which is the one that the average person can pick up the remote and say ‘iPod’ and have it play throughout the house?”
Staff writer Kimberly S. Johnson can be reached at 303-820-1088 or kjohnson@denverpost.com.
