On Thursday, struggling electronics retailer Tweeter Home Entertainment Group, Inc. (NASDAQ:TWTR) announced plans to close 49 of its 153 locations, slash 20% of its workforce, and refocus its energy on its Consumer Electronics Playground store format. The move comes after years of struggling to compete with stores like Best Buy Co., Inc. (NYSE:BBY) and even Wal-Mart Stores, Inc. (NYSE:WMT), and sent the company's shares up more than 25% on Thursday.
With the Tweeter stores underperforming, TWTR appears to be putting its energy into the CE Playground stores, and is beginning the process of converting many Tweeter Locations into CE Playground. Will it work? I'm skeptical. The new concept appears interesting, and according to the company, will move the company towards a service and installation-based business model. According to CEO Joe McGuire, "We have evolved from being a traditional retail store with strong product knowledge skill sets to a solution-centric demonstration and display model that also teaches our customers how to bring CE products to life through integration and installation."
While the idea is interesting, it seems likely that bigger players like Best Buy will still be able to crush them if the format works. That said, the stocks looks very cheap and, if you have faith in the CE Playground concept, you may want to take a look at TWTR shares.
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