Sixty-two years after Ken Crane started selling early-model television sets out of a storefront on Crenshaw Boulevard, the venerable local chain is going out of business.
Over the weekend, the six remaining stores in the Ken Crane’s Home Entertainment chain began liquidating their inventory of big-screen TVs, and a big sale drew crowds. But the ongoing sale was bittersweet for Crane’s daughter and son, who grew up in the family’s stores and took over the company after their father’s death in 2004.
“It’s the most gut-wrenching, painful decision we’ve had to make,” said Pam Crane, who serves as the company’s executive vice president. She blamed the chain’s demise on the economy more than on cutthroat competition in the home electronics business.
Over its long tenure, Ken Crane’s reflected the changing world of television sales. The tenacious entrepreneur won his dream commission in the mid-1960s, when color was coming to television: Magnavox made him an exclusive dealer of its high-end TVs and consoles.
When larger-screen models came in during the 1970s, the company started selling them, eventually positioning itself as a specialist in home theater systems and big-screen TVs. As plasma and LCD technology came in, the firm embraced those technologies, offering high-end service and installation along with sales.
At its peak, the Hawthorne-based firm had 10 stores.
But the marketplace for selling televisions has become fiercely competitive, as the cost of flat-screen TVs has plummeted and discounters like Wal-Mart, Target, Fry’s and Best Buy have laid claim to what was once a high-end business.
Then came a tanking economy and the credit crunch, and the company so lovingly built up by Ken Crane and his family began to topple. Sales for 2010 were estimated to be less than half those of 2007, the company’s banner year, when consumers bought $60 million worth of TVs.
The first layoffs to the staff of 200 came in 2008, as brother and sister struggled to stay afloat. More job cuts came late last year, and in January the firm shut four stores and retained just 75 employees.
The final squeeze, said President Casey Crane, came from the lending crisis that has hit small businesses throughout the country. It was so difficult to get credit to bring in inventory, he said, that Crane’s could not deliver on $700,000 worth of sales that had come in over the Labor Day weekend because the company could not obtain funds to pay its distributors.
“When the subprime-market thing hit, everything tightened up,” Casey Crane said. “Customers, for fear of losing their jobs, quit spending, finance companies quit lending, and eventually our ability to purchase became limited.
“It was the perfect storm for disaster.”
Crane’s is one of many specialty electronics stores to be hit by the dual whammy of a changing industry and a down economy, said Bill Dombrowski, president of the California Retail Assn. Small companies like Crane’s suffered along with larger counterparts like Circuit City, which went out of business last year.
“Electronics is one of the most fiercely competitive areas right now in retail,” Dombrowski said. “It’s brutal.”
Small players like Crane’s, he said, are particularly vulnerable.
“They were at a disadvantage even before the economy went into the tank,” Dombrowski said. “Now they’re really at a disadvantage, because they’re operating in one of the parts of the country that was hardest hit by the economy.”
Retail sales in Los Angeles County plunged nearly 20% during the second quarter of 2009, the most recent period for which local statistics are available and a key indicator of the forces that battered Crane’s last year, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.
Among the hardest hit, he said, were businesses like Crane’s that related to building and furnishing homes, he said.
On Monday, the company’s flagship store in Hawthorne was packed with bargain-hunters as well as longtime customers. “People are coming back just to say, ‘Thank you,’ ” Casey Crane said, his voice breaking.
The crowds over the weekend and on Monday overwhelmed the small number of employees who still work for the chain, Casey Crane said.
Worried that customers would feel neglected, the 53-year-old said, he worked the floor beside his salespeople. “I don’t want anyone walking out the door feeling like they haven’t been treated right.”