December 16, 1996 6:00 PM ET
PC retailers hard-pressed to find glad tidings
By Margaret Kane

  Retailers may be seeing an increase in sales this holiday season, but for many PC retailers and resellers, it's still not quite time to celebrate.

Today Circuit City Stores Inc. reported a 10 percent drop in same store sales for the third quarter compared with last year. (Same store sales exclude sales from stores that have opened since last year.)

The Richmond, Va., company reported net earnings of $19.8 million for the quarter ended Nov. 30, down from $31.5 million the year before.

"Sales of personal computers weakened dramatically while sales of most consumer electronic products remained soft," said Circuit City CEO Richard Sharp, who characterized the industry climate as "challenging."

Other resellers also reported "soft" sales going into the holiday season, particularly in the consumer market. Best Buy Stores Inc., for example, recently reported a decline in same store sales for November as well.

Wally Raymond, vice president of sales at Laptop Superstores, based in Natick, Mass., said sales have been "fair to good, but not fantastic."

Raymond added, "Because it's a much shorter time period between Christmas and Thanksgiving this year, people are very busy doing other types of shopping."

He said his company is expecting a bigger push at the end of the year from business sales.

"We have people who have to spend money to finish out the budget," he said. "I'm guessing that's going to happen the week after Christmas."

Raymond said pricing has been key in moving notebooks, a sentiment that is being echoed in the desktop market, particularly as vendors slash prices.

"We have seen some customers come in with the ads from vendors," said Tim Carney, service manager for G. Blackstone Enterprises, a Micro Age reseller in Carbondale, Ill. "As far as name brands go, I see far more clones being sold because of the pricing."

Carney remained optimistic about the overall season.

"It should do better due to the rise in the economy," he said. "We've seen more people--business and consumer--because [they] seem to have more money in their pocket."

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