Actions taken by Bernie's raises questions about chain's financial stability

Bernie's, New England's largest independent retailer of televisions and appliances, is no longer selling items online, has become less active with a group that gave it national-chain buying power and is not accepting charges on its in-store credit card, leading some retailing analysts to question the company's long-term viability.

Enfield-based Bernie's, with 15 stores spread throughout Connecticut, Rhode Island and Massachusetts, had been in an expansion mode up until two years ago, having opened a new store in the Fairfield County town of Brookfield in 2008 and in the same year introducing what it called its "prototype store" in Waterford, which included a new luxury kitchen department. Also in 2008, Bernie's launched its new Web site, bernies.com.

But the company's expansion came just as a severe recession hit New England, driving down demand for electronics and appliances.

"Bernie's started to sell furniture just as that market tanked along with appliances and electronics. The profitability just dropped out (of the business)," Alan Wolf, retail editor for the trade publication This Week in Consumer Electronics, said Wednesday.

Wolf said the troubles at Bernie's are similar to what other regional appliance retailers have been experiencing. With national retailers becoming more efficient - and cut-rate retailers such as Walmart starting to sell top-brand electronics products at low prices - places like Bernie's that hire commissioned sales people started becoming less profitable, he said.

"Prices never go up in consumer electronics," Wolf said.

Wolf's trade publication reported Tuesday that Bernie's has withdrawn from the New York-based NATM Buying Corp., a group of regional chains that banded together to boost their purchasing power. But William Trawick, president of NATM, said Wednesday that Bernie's was still a member in good standing with his buying consortium.

"They have their issues," said Trawick. But he added that "until something happens," he could not comment further.

Wolf had reported that Bernie's did not attend NATM's annual meeting last week in Las Vegas.

The trade publication said that two of Bernie's top executives - Vice President John Schlenner and President and Chief Operating Officer Mike Honeyman - have left the company in the past two months. Schlenner had no comment about the future of Bernie's and Honeyman could not be reached.

The departures left Chief Executive Officer Milton Rosenberg, son of the company's founder, operating the privately owned firm with a much-reduced executive staff. Rosenberg, as well as other Bernie's officials, did not return repeated calls seeking comment.

Calls to various Bernie's stores in Connecticut, Rhode Island and Massachusetts revealed that the retailer is selling products only at individual stores, not online, and that it no longer accepts in-house credit cards supplied by GE Money Bank. An e-mail to GE Money Bank seeking comment did not elicit a response.

Bernie's Web site is advertising a January clearance sale that promises between 12 percent and 75 percent off its inventory, including 20 percent off heaters and home theater systems.

At the Crossroads Shopping Center store in Waterford, one of eight Bernie's sites in Connecticut, customers continue to come and go, the only difference being that the outlet now includes an on-site security guard. Wolf, the consumer-electronics editor, said the national chain Tweeter experienced extensive employee theft after it closed down a few years ago.

Company officials said during the Waterford store's grand reopening two years ago that the local site was among the chain's most profitable. The company at the time had 20 employees in the Waterford store and about 300 throughout New England.

Bernie's origins date back 63 years, according to information posted on the company's Web site. Bernie Rosenberg started the company, parlaying a Hartford service station into a chain of retail stores that numbered five by 1985, when Rosenberg sold his company to Newmark & Lewis of Hicksville, N.Y.

Rosenberg's son, Milton, stayed with Newmark & Lewis, serving as president of its Connecticut and Massachusetts divisions. He opened up nine new locations for the retailer before parting ways with the company a year before it filed for bankruptcy in 1991.

Later in 1991, Milton Rosenberg bought back the Bernie's name for $1 and proceeded to resurrect the company his father had started.

"Even after Newmark & Lewis had bruised the reputation of the company they'd bought, Bernie's bounced back right away," Rosenberg said on the company Web site.

In 2004, Bernie's became partially owned by employees as Rosenberg sold a 30 percent stake of his company to associates through a stock ownership plan. About the same time, the company opened its new headquarters in Enfield.

l.howard@theday.com