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CANTON, MA – The next generation of Tweeter Home Entertainment Group stores will be unveiled at the CES 2005 show in January, and company officials say they will back the new prototype up with a new national brand and marketing strategy. The company’s first new concept store will open, appropriately, in Las Vegas, site of CES 2005.

“The Las Vegas store is different than the Tweeter you see today at our current locations,” says Jeffrey Stone, president/CEO of the 175-store chain, based here. “We’re moving from our current model of product retailing, evolving into a service company offering a variety of services.”

The new prototype for the consumer electronics retailer has been designed by the company’s own in-house people in collaboration with the Cincinnati-based FRCH Design Worldwide. And that design is more interactive: “Tweeter customers will find entertainment systems that are specially designed and configured for experiencing sports, movies and music in a way that makes sense for them,” Stone says.

“Using an ‘experience map,’ customers will be able to navigate through display and demonstration areas,” he continues. “A team of entertainment ‘architects’ will work with customers to develop personalized entertainment systems in an in-store design studio.”

The prototype also includes an in-store area for mobile multimedia and portable products, and rooms for home theater and audio demonstrations.

“Along with new industry partners like Microsoft and HP complementing our existing supplier group, we are creating a new way for consumers to shop,” Stone says. “We plan to test and refine this concept and will integrate our learning into our other markets over time.”

And Tweeter is backing it all up with a revamp marketing and branding push. For openers the company, which was founded by current chairman Sandy Bloomberg in the early 1970s, operates under five different names owing to acquisitions over the years, but that’s about to change. Over the next 18 months, the names Sound Advice, HiFi Buys, Hillcrest High Fidelity and Showcase Home Entertainment will disappear and all of the company’s outlets will bear the Tweeter name.

“Our research has shown that our customers are fiercely loyal to our salespeople and installers,” says Mark Richardson, SVP and chief brand officer. “They are happy to shop at a renamed store as long as they see that it’s truly new and improved. Moving to one brand will allow us to occupy one position in the minds of home and mobile entertainment buyers.”

Tweeter will also change its advertising mix, scrapping much of its print advertising and shifting more of its ad dollars, about 50%, to television. The broadcast campaign, which launches later this week in the company’s Northeast, Southeast and Southwest markets, features the company’s new tagline, “We Can Untangle Your Mind.” The TV campaign is the brainchild of the Boston-based Partners + Simon.

The changes come at a time when the company, which had FY ’03 revenues of $787 million, continues to show some weak performance numbers. Preliminary figures for the company’s fiscal year ended September 30 show comparable store sales declining by 3.5% for Q4 and revenues off by 3.4% to $179 million.

The comparable store numbers were exacerbated by more than 190 lost store days in Florida owing to September’s storms there. But even taking that into consideration, comparable store sales chain-wide were still off by close to 2%. For the full year, preliminary total revenues were up by less than 1% and comparable store sales dropped by close to 1% compared to the previous year.

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