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2012 Hall of Fame: Babak Ghaznavi

Babak Ghaznavi, President of Paul’s TV

January 2012 By Jeff O'Heir
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"Without the right inventory, you can lose a customer," he said. "The customer doesn't want to wait for it."

During his nine years at Circuit City, Ghaznavi was moved to nine different stores, always to make improvements. "I liked it because I worked for different store managers and learned from them what to do and what not to do," he said. "It taught me a lot."

The lessons were well-learned.

"He is a guy that has constantly been able to show leadership at all levels," said Dave Gentry, whom Ghaznavi hired when he was sent to open Circuit City's store in San Francisco. "Babak has that Midas touch. He understands all aspects of the business what drives the consumer, add value and still make money at it."

But, as everyone in retail knows, sometimes you have to lose money to gain a customer and beat the competition. One example of that stands out. Shortly after Ghaznavi was tapped to open a flagship Circuit City in San Francisco, he sold a TV for $499 to a customer who immediately went across the street to a Good Guys store, got a better deal and returned for his money back. Ghaznavi beat the price but the guy came back saying that the Good Guys offered an even better deal. Fed up, Ghaznavi sold him the TV for a penny, wrote on the invoice "Don't Mess With Me!" and had the customer show it to the manager of Good Guys. A few days later, the Good Guys manager offered Ghaznavi a job as district manager. "I was always taught to be competitive," he said

When the Good Guys folded 13 years later, Paul's TV hired him as a consultant and quickly made him a vice president (today, he's also one of the owners). It was 2006 and flat-panel TVs were starting to become a commodity. He added lines, cut advertising expenses and renegotiated media buys, stopped Paul's practice of giving away accessories, brought on Monster's line of cables and other products, adjusted back-office operations, centralized the warehouse, remodeled the store, and increased vendor support.

The strategies worked but by 2009 TV prices were steadily dropping and brick-and-mortars were losing business to e-tailers.

In what many consider Ghaznavi's masterstroke, Paul's TV began partnering with furniture companies, a move that expanded Paul's TV's business from Los Angeles throughout the rest of the country.

The timing was right. Paul's TV was able to fill eventual voids left by the closures of Circuit City, Ultimate Electronics, Berny's and Tweeter, to name a few, and hire their skilled employees to staff the new stores. Paul's TV's furniture partners include Art Van in Michigan, Haynes in Virginia and Jordan's in New England, Furniture Row in Colorado, and Living Spaces in California.

During the last few years, Paul's TV has increased sales of accessories, warranties, installation services and, of course, audio, a category that still carries respectable margins, Ghaznavi said. Non-TV products now account for about 30 percent of Paul's revenue and ales per-square-foot in the stores rank about fifth among retailers in the U.S.

"The more home-theater experience you sell, the happier the customer is, especially if we install it; you never see the product come back," he said. DS


 
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