Knight Ridder/Tribune Business News
May 18--Electronics chain stores are having a tough time getting connected in Myrtle Beach.
Electric Avenue & More plugged in.
But now, the electronics superstore is being replaced by Sports Authority, a chain of sporting goods superstores.
Best Buy and Circuit City were interested in filling Electric Avenue's 44,500-square-foot vacancy at the Seaboard Commons shopping center in Myrtle Beach, but neither chain followed up.
Myrtle Beach is big on tourism -- drawing more than 11 million visitors last year -- but it's not big enough to support electronics chain stores, which base their decisions on population, discretionary income and location.
'This pie ain't that big,' said Harold Ferrell, chairman of AVAC of Myrtle Beach Inc., a family-owned, Myrtle Beach electronics store.
'They (competitors) see all these cars and people here and they think it's a money hole, but a guy from Ohio don't strap a big screen (TVtelevision) on the top of a Volkswagen and take it back to Ohio,' Ferrell said. 'The market isn't as big as it appears.'
Indeed, Ferrell said, he gave Electric Avenue two years when it opened. He was wrong close. The store closed down a year and eight20 months later.
'The store was too big, too expensive and the overhead was too high,' Ferrell said.
It's not as if the chains aren't looking for new markets.
Best Buy In a 12-month period, Best Buy opened 13 stores. The Eden Prairie, Minn.-based chain of superstores counts boasts 289 locations in the United States, up from 272 in fiscal year 1997. The chain has four stores in South Carolina, -- two in Columbia and one each in Greenville and Spartanburg.
Later this year, Best Buy will open a 43,000-square-foot store in Charleston.
Circuit City is even more aggressive. The Richmond, Va., chain plans to open 60 superstores and replace 15 existing stores by the end of fiscal year 1998.
According to documents filed with the Securities and Exchange Commission, Circuit City, which has 502 superstores in the United States, has opened 33 new stores this year.
While Myrtle Beach is part of one of the fastest-growing metropolitan statistical areas in the United States, there still aren't enough residents to support a big box electronics store.
Big box stores, also known of as category killers, are huge stores that carry a wide variety of goods at competitive prices.
Horry County's average annual wage -- at $18,551 in 1996, according to the Bureau of Labor Statistics -- isn't sparking excitement in real estate offices of either Circuit City or Best Buy.
'Obviously, the big chains are going to do very careful research on a marketplace before they enter,' said Chris Cooper, a vice president with Charleston-based America's Research Group. 'What they see is there's not that many people who go on vacation and come back with a VCR.'
Superstores aren't entirely unknown to the Grand Strand.
The area counts two Wal-Mart SuperCcenters, with a third outlet about to open near Briarcliffe Mall.
The Sports Authority is the largest sports superstore chain in the United States.
But those stores sell the types of products tourists buy. They were able to put some of their revenue projections on the discretionary income of tourists, Cooper said.
'As a year-round population, there's not enough punch in that marketplace to support half of what you've got,' Cooper said. 'If it weren't for the tourism factor, the companies you have would not have come into the market.'
While Myrtle Beach is not strong enough for chains, it's a good home for independently owned electronics stores.
AVAC is as close as Myrtle Beach is going to get for a few years to an electronics mass merchandiser.
The store, on the corner of 10th Avenue North and U.S. 17 Bypass, sells appliances, DVDs digital video disc players, VCRs, videocassette recorders, car and home stereos, home entertainment systems and rents DVD digital video discs.
AVAC makes the market work because of low overhead and because it is able to buy wholesale through a nationwide distribution company, Ferrell said.
'I can buy as cheap as the next guy,' Ferrell said. 'And we watch our overhead so I can sell it as cheap as the next guy.'
Big chains such as Circuit City and Best Buy come into new markets with a few counts against them, Ferrell said. They have higher overhead than most independents, not including the cost of building a new store.
Even with a profit margin of about 5 percent or 6 percent, lower than the national average, AVAC is able to succeed because of its low overhead.
The store's management structure reads like a family tree.
Ferrell is chairman. His son is president, wife is secretary/-treasurer and daughter-in-law is the head bookkeeper.
'The topic of conversation in this industry wherever you go is there's no profit in this business,' Ferrell said. 'We're the only industry that eats our young.'
Sunshine Cameras, which has been in Myrtle Beach for about 19 years, bases its success on customer loyalty and low overhead, said Billy Gowan, the store's manager.
'We offer a service that mass merchants can't,' said Gowan. 'It's much more personalized. I know a lot of our customers on a first-name basis.'
Sunshine, on North Kings Highway, sells cameras, digital cameras, car and home stereos, and televisions, and it develops film.
Gowan said he sees his customers in church, at Lion's Club meetings and at local family events.
'If you're spending $300, $400, $500, that's a lot of money,' Gowan said. 'You want to buy from somebody you trust.'
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