Hastings Entertainment chairman John Marmaduke and CFO Dan Crow are about to embark on a road show to talk up the company's prospects—and stock price—to brokers and dealers. According to the retailer's Power Point presentation, the men will inform their audience that Hastings's multimedia approach "increases customer appeal and shopping frequency, while decreasing sector risk." In 2005, music was Hastings's largest segment, followed by books.
To highlight its diverse product mix, Hastings is launching a new branding campaign with the slogan "Discover Your Entertainment." Along with its different product offerings, Hastings is also touting the different transaction methods it offers customers; in addition to a traditional sale, Hastings lets customers rent, sell or trade products. That approach, Hastings says, helps to differentiate the store from its competitors while allowing it to build a broad selection with minimal investment. The different options also allows Hastings to capitalize on what it sees as the trend of baby boomers and Gen-Xers looking to cut back on their possessions and interested in trading in old items. To that end, Hastings is increasing its commitment to used products in a bid to become what it terms "the first new and used entertainment superstore."
An important part of the used equation is Hastings's expansion of used books sections, which the company first introduced in 2005. Hastings sold used books through 14 stores in 2005 and will up that number to 37 by the end of this year. The company is spending $800,000 per store to remodel or relocate 12 outlets and $200,000 per store to remodel 11 additional stores to accommodate used books. The impact of used books on Hastings's operation can be seen in its first-half results. While same-store sales in the period were off 0.4%, increased sales of used books helped to limit the decline.
One thing that will not change is Hastings's strategy of serving medium-size markets that are unable to support single-format category killers. The company continues to build its Internet business and projects that sales over the Web could reach $3 million this year.
