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SUN TV SEEN SUCCEEDING ON SECOND TRY HERE

While its return to the Buffalo market is an unprecedented move in local retailing, Sun Television and Appliances Inc. stands a good chance of success, retail observers said Tuesday.

Columbus, Ohio-based Sun announced Tuesday that it will reopen the three local stores it closed a year ago, calling its decision to leave the Buffalo market a mistake.

Among those who see an opportunity on the local retail scene for the "new and improved" electronics/appliance dealer, is University of Buffalo marketing professor Arun K. Jain.

"I think they will once again serve a category of consumers who are extremely price sensitive, but still like some personal attention," Jain said.

The Buffalo market, while competitive, is not over-crowded, according to Jain.

"I always think its good to have more competition. It's really good for the shoppers in the Buffalo area to have more choices and those choices were reduced when Sun left last year," Jain said.

An added bright spot for Sun is the local market's apparent continued recognition of the chain, despite the fact it pulled out of the market over a year ago.

A late 1997 survey by market research firm Scarborough Research found 25 percent of respondents said they had shopped for audio/video gear at Sun in the prior 12 months, the highest percentage given for any electronics retailer in the market.

Circuit City, Kmart and Wal-Mart followed Sun, with 22 percent, 20 percent and 18 percent, respectively, of consumers saying they'd shopped the stores. Locally-owned
Stereo Advantage tied the now-departed Lechmere, at 15 percent.

Sun ranked No. 3 among large appliance shoppers, and No. 6 for visits by computer shoppers.

Michael Littman, an associate business professor at Buffalo State College, said that, ironically, Sun's vacant stores have served as a continual reminder of the retailer.

"They didn't truly disappear from the market because people would look at those buildings and think about Sun. The high-profile buildings acted like billboards for them," Littman said.

Jeffrey Corcoran, an Ballston Lake, N.Y.-based retail consultant, said he observed a similar carryover in the Albany area when an apparel retailer reopened a store in a site it vacated 20 months earlier.

"I think it is something we'll see more often as retailers who expand too fast, regroup and regain the financial strength to operate more stores," Corcoran said.

The consultant said if the company's problems were internal ones, unrelated to either the market or the particular location, it can make sense to return to a former site.

"In today's market, with so much retail contraction, there's a good chance the space will still be vacant if they want to reopen. And if they liked the old location, they can probably get it cheaper now," he added.

In the case of Sun's three empty stores -- S3701 McKinley Parkway in Blasdell, 1561 Niagara Falls Boulevard in Amherst and 2150 Walden Ave. in Cheektowaga -- the landlord has altered the lease terms.

A representative of Benderson Development Co., which owns all three sites, confirmed Tuesday that it has "reworked the leases" to assist Sun's return to the market.

Arthur Judelsohn, president of Berlow Real Estate, who represented Sun in the negotiations, said the company's return in May "makes perfect sense."

"I wasn't shocked by the decision to come back because they did a good job when they were here, and will do even better as they implement their service and image changes," Judelsohn said.

Over the past year, Sun has overhauled its management team, and hired turnaround expert, R. Carter Pate, a managing partner with Price Waterhouse, as its chief executive officer.

With Pate at the helm, the regional retailer has begun to grow again through the opening of smaller stores in smaller markets. The company has also seen its losses decrease a little more each quarter, aided by better operational margins.

The turnaround strategy also includes sweeping customer service changes involving 30-day price guarantees, on-time delivery pledges and management compensation tied to individual store per-formance.

Pate, who was candid in admitting Sun "gave up too quickly" on Buffalo, also admitted opening remodeled local stores and promising enhanced service will require follow-through.

"We're going to have to work to win back the loyalty of the Buffalo customer. That won't happen overnight, but we believe it will happen," Pate said.

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