CLEVELAND, Ohio - Bob McGregor stopped in at B&B Appliance on Wednesday to buy a DVD/VHS machine at the 93-year-old company's going -out-of business sale. In the past few decades, he's bought everything from a new 4K TV to stereo systems, but this time he just wanted to show his continued support and appreciation. "The parking lot is almost full. I love it here because of the way I'm treated. It's hard to find this machine anywhere else," said McGregor, 70, who also enjoys shopping at big box retailers for certain items.
"There's just no comparison to shopping here as opposed to national retailers. My salesman, Flint, calls me when they have certain sales or when he thinks I might be interested in something. It's all about honesty here. And they make you feel valued here." McGregor is among B&B Appliances loyal customers, but unfortunately the third-generation-run store needed a lot more customers to stay in business.
Jeff Blumenthal, president of the company, said he and his brother, Marc, had been considering closing the business for quite some time, but after reviewing the disappointing first quarter numbers, they were forced to make the decision. "It was a tough decision," said Jeff Blumenthal, 62, president of B&B Appliance. "The bottom line is that we are no longer profitable." The company has started an inventory clearance sale, offering extra savings off B&B's discounted prices on appliances, TVs, washer and dryers and lots of other products.
The going-out-of-business sale is expected to take a couple of months at both locations in Euclid and Middleburg Heights. Adam Sonnhalter, a partner at Maximum Value Partners, a small business coaching and consulting firm, said he commends the Blumenthals for making the tough decision. "It sounds like they tried a lot of things to make the stores profitable and instead of continuing to go down the path of losing money to the point where they were no longer in control, they decided to close the stores while they still had options," he said.
"A great lesson for all business owners is that just because you've been in business for three months or 93 years, you aren't guaranteed to be in business tomorrow uniess you continue to evolve and change with the times," Sonnhalter said. "Some businesses are very difficult to compete in whether it's a large or small business," he said. "Just today HH Gregg announced that they are closing 88 stores nationwide to help with their profitability.
The small business typically can't compete with bigger business on price." At the same time, Sonnhalter said there are things that small businesses offer that big companies typically can't. "The heart and soul and caring of most small businesses, which starts with their owners, is difficult for the big guys to duplicate," he said. B&B Appliance has 33 employees, many of whom have been with the company for more than 30 years.
"We are grateful to our dedicated employees and loyal customers who have been part of B&B over the last 93 years," said Marc Blumenthal, 56, the company's vice president and brother of the president. Their father, Larry, ran the business that his father started with a partner, for more than 50 years. Less than one third of family businesses survive the transition from first to second generation ownership, while another 15 percent make it to the third generation, according to the Wharton School of Business.
Customers on Wednesday ranged from young shoppers who had never heard of the store until they heard about the going out-of-business sale, to long-time shoppers like Rina Brosse, 81, who has shopped at the store for decades. She bought a washing machine and dryer there several months ago, but Wednesday she came out to show her support and possibly find a deal. "I just think it's unfortunate when a company that's been around for such a long time can't make it," Brosse said.
"They have excellent service and quality products. It's not like going to a Home Depot, where it's like ... good luck." B&B Appliance is among the latest casualty of independent retailers that find it increasingly difficult to compete with much larger retailers. At it's peak in the late 1990's, B&B sales peaked at $25 million with three locations. The company added a Bedford Heights location that did not work out.
Blumenthal said the store closed in 2001. "We closed that store because the community wasn't supporting it the way we thought. Customers were still traveling to the Euclid store. We thought we'd get more customers from Solon, Aurora and Twinsburg," Blumenthal reflected. " I don't know if it was because they were used to working with certain people, or if it was because the Bedford area had deteriorated in that area, but it proved not to be a good location for us.
" Flint Parker is among the long-term employees at B & B. He's worked there for 28 years. He returned from a two-week vacation to learn his employer was going out of business. He got a personal call from the owner because he didn't want him to find out any other way. "The Internet is fueling all of this. Most people buy and research things on the Internet, especially if you're under 35," Parker said.
"Only the oldsters want to touch and feel items before they buy it. It's sad. I should have retired five years ago, but I love my job." Blumenthal however doesn't give that much credit to the Internet. He believes that price-comparing is important and always welcomes an informed consumer, especially considering he knows he could have generally matched or beaten the price. The biggest factor in deciding to close he said, was the inability to expand.
"We know that in any business if you don't grow you won't have the ability to sustain your efforts and invest in the future. It's necessary to invest in technology and get creative with displays," Blumenthal said." But ultimately in this environment, expenses continued to increase and the economics didn't make sense. "I would say that with so many categories, the market just disappeared, from audio products to video products - things like car stereos, home audio, stereos, speakers and video camcorders.
Electronics used to be 40 percent of our business and now it's just 10 percent," Blumenthal said. B & B will honor commitments to customers who have deposits on - or have paid for merchandise that hasn't been delivered. Information about B&B's closing will be updated on the company's website. The third-generation locally owned business was founded by Max and Irvin Blumenthal in 1924, and originally began as an auto supply company.
During World War II, automotive parts were channeled to the war effort, so B & B switched its focus to selling appliances. After the war, appliances, radios, and then televisions became the core products. Max Blumenthal's sons, Sid and Larry, took over the business in the 1940's. In 1977, Larry Blumenthal opened a second store in Middleburg Heights, and a third store in Bedford Heights in 1992.
Larry passed away in 1993, and his sons, Jeff and Marc, took over the business. In 1994, fire destroyed B & B's store in Euclid. A brand new store was reopened on the same site in 1996. Parker remembers that difficult time as well. "We got paid for a year until this location was rebuilt ... We worked at a different location," he said. "I've worked at other places, but there's just nothing like working for a family-owned business.
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