Consumer Electronics Industry Snapshot Myer-Emco
Jon Myer, President, Myer-Emco
1) How did 1998's financial turmoil affect our business?
With the exception of a slight slowdown in our installation business in September, we really have not felt any impact from the market turmoil. Through ten months, 1998 has performed exceptionally well, posting both record sales and profits. YTD sales are up 18 percent overall, and profitability should be the best we have had in our 44-year history. That's the good news. The bad news is that I don't believe that the impact of the market turmoil has really been felt yet. If the market continues its fluctuations but avoids any serious sustained drop, I don't think we will experience any significant downturn. The current correction was one we could all expect, and it is probably healthy in the long run for our economy. My concern is that, for the A/V specialist, our most significant growth has come in custom design and installation sales. These sales are to the most affluent demographic and are the same people heavily invested in the market. Should their "paper wealth" drop materially, our types of products will be the first to feel a spending cutback. At the same time, in order to build more substantial custom departments, many specialists have invested heavily in primarily fixed costs--engineers, computers, project managers, installers, etc. Should the economy weaken drastically and custom sales revenue drop as well, many dealers could find themselves in a very tight situation.