Providing a cautionary tale on the fickleness of technology, Rexwas battered by anemic demand for tube and projection televisionsas flat-panel LCD and plasma alternatives overwhelmingly capturedconsumer hearts in 2006.

"We expected a drop-off, but nowhere near the decline that wehad," Rex CEO Stuart Rose relayed in a conference call held Mondayto unveil year-end results and strategies to provide needed cash,including the sale/leaseback of nearly 100 stores.

Revenue sank from $374.5 million in FY 2005 to $347.3 millionlast year, while net income plummeted from $28.3 million to $11.4million. Tube and projection televisions suffered an 11.2% drop insame-store sales compared to FY 2005, with big-screen TV salesalone tumbling from $13.0 million in FY 2005 to just $3.5 millionthis year. Ipod's sound trouncing of other audio systems led to a2.6% decline in same-store sales in that category.