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Sirius Deal Expected to Send Stern Fans Receiver Shopping

Howard Stern’s pending move from broadcast to satellite radio hasn’t led to a rush of listeners snapping up receivers that can pick up the signal, but several local retailers last week were expecting new business to come their way.


“It’s going to pay off,” said Ali Shah, manager of Good Guys in Studio City, which sells about five Sirius radio receivers each month. “We are going to see some change in demand for Sirius Satellite. It’s become big news, everyone knows about it and we have customers that bring it up on their own.”


Sirius’ 600,000 subscribers pay $12.95 per month to receive more than 120 digital channels. The five-year, $500 million deal Stern signed is expected to lure a significant portion of his listeners when he makes the move in January 2006. Sirius is betting that Stern will help it better compete with its larger competitor, XM Satellite Radio, which has about 2.1 million subscribers who pay $9.99 monthly for 100 channels.


Ova Oviasogie, manager of a RadioShack on La Brea Avenue in Los Angeles, said he anticipates sales will increase as the holidays approach, aided by the publicity about Sirius following Stern’s announcement.


Others remained cautious.


“It’s still a little too early,” said Max Flaxman, manager of Al & Ed’s Autosound on Santa Monica Boulevard in West Hollywood.


“Fifteen months away is a long way off for people to get too excited. There is an interest but not a sales increase,” he said.


However, Flaxman added that with Stern’s announcement, eventual sales growth is “guaranteed.”


The Sirius receivers at RadioShack have a retail price of $99, though the chain was offering $60 in rebates on the devices on its Web site last week.



Car Deals

Discounts on new vehicles reached new heights last month as dealers slashed an average $5,200 off sticker prices for the first time in history, according to Edmunds.com Inc., a Santa Monica-based firm that tracks the auto industry.


While region-specific data was not available, Los Angeles is likely to have experienced even greater discounts due to the high volume of competition here, said Jesse Toprak, director of pricing and market analysis for Edmunds. “People are generally able to get better deals for most vehicles than in most other markets in the nation,” said Toprak.


The increase in discounts is due to several factors, including excess inventory of ’04 models and the high cost of fuel. Seventy-five percent of all cars sold in September were ’04 models, said Toprak. Manufacturers coughed up a record $3,146 average per vehicle in incentives nationwide, while dealers paid roughly $2,000 in discounts.


Industry-wide, the average days to turn was 82 days, compared to 75 days last year, said Toprak. The ideal is under 50 days, he said.


In September, the average sales-weighted new vehicle sticker price nationwide was $30,104. That marked a $573 increase over the month-earlier and an $878 increase over the prior year. The sales-weighted net price was $24,817 last month, putting the average discount at 17.6 percent off the sticker price.



Shoe Biz


The battle between Los Angeles footwear company Taryn Rose International Inc. and Viennese manufacturer Karlheinz Schlecht has ratcheted up in Los Angeles Superior Court.


In an amended complaint filed last month, TRI has alleged that Schlecht, its owner Karlheinz Schlecht, designer Thierry Rabotin and two former TRI employees “conspired to create a competitive line that would be sold to the customers of TRI, the identities, preferences and buying habits of which were the trade secret and proprietary information of TRI.”


The suit includes claims of breach of contract against Schlecht, and unfair competition, interference with contract, misappropriation of trade secrets and trade libel.


“We don’t believe any of it has any merit,” said Michael Conway, an attorney at Lazare Potter Giacovas & Kranjac LLP in New York representing Schlecht and the other defendants. “Karlheinz Schlecht had been manufacturing a line of Thierry Rabotin shoes worldwide and in the U.S. long before Taryn Rose manufactured her line of shoes. Karlheinz Schlecht provided Taryn Rose with the blueprint for her shoes and the manufacturing capability to create a line of shoes.”


Schlecht filed a cross-complaint on Sept. 30, alleging breach of contract, intentional interference with prospective economic advantage, unfair competition, trade libel and violation of labor code. The cross-complaint alleged TRI failed to pay for more than $4 million worth of shoes manufactured by Schlecht.


Staff Reporter Rebecca Flass can be reached at (323) 549-5225, ext. 230, or at

rflass@labusinessjournal.com

.

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