Fretter

Fretter was an American consumer-electronics and major-appliance retailer founded in the Detroit area during the 1950s by Oliver “Ollie” Fretter. The chain became particularly recognizable in southeastern Michigan through its aggressive low-price positioning and the television presence of its founder, who served as both company spokesman and a familiar local advertising personality. Fretter’s commercials used a memorable price-beating promise: if the company could not beat a customer’s best deal, it would provide five pounds of coffee. The offer was deliberately theatrical and helped distinguish the retailer in a competitive regional market. On occasions when the pledge had to be honored, the company reportedly distributed one-pound coffee cans relabeled to suggest a five-pound quantity. The company’s retail model centered on discount-oriented pricing, although its merchandise and store strategy were more complicated than its advertising implied. Fretter sold household appliances, televisions, audio equipment, and other consumer electronics, including products positioned at a higher end of the market than some competing discounters. Because retailers commonly carried different model numbers from the same manufacturers, direct price comparisons were often difficult. Fretter used outside research firms to compare its prices with competitors and made the findings available to sales staff through point-of-sale terminals. Management hoped that this would reinforce its low-cost reputation, but the chain’s advertising did not always explain that it could be competitive on comparable products while also carrying higher-end merchandise. Sales employees worked under a draw-against-commission system supplemented by incentive payments, often called spiffs. These payments were linked to profit margin and other factors rather than simply to the selling price. Product price endings served internally as indicators of margin and incentive levels: some endings identified higher-margin products, while others were associated with advertised, clearance, or special-order merchandise. This system encouraged salespeople to recommend products that were difficult to compare directly with competitors’ offerings, rather than automatically steering customers toward the most expensive item. Fretter also operated beyond conventional home-electronics retailing. It owned DASH Concepts, a smaller mobile-electronics business serving the Detroit and Cleveland areas. DASH Concepts installed car audio, vehicle-security systems, and related equipment, and operated from a warehouse in Dearborn, Michigan, shared with a Fretter location. During the early 1990s, Fretter attempted to respond to the growing superstore format represented by Circuit City and Best Buy. The company acquired the employee-owned Fred Schmid chain, giving it a presence in Mountain states markets, and temporarily moved its corporate offices to Colorado while the integration was managed. In 1993, Fretter also acquired Silo Electronics, a larger competitor that had struggled financially for years. The transaction substantially increased Fretter’s store base and, measured using the acquired businesses’ previous sales, briefly made the combined company the second-largest retailer in its category after Circuit City and ahead of Best Buy. The expansion created substantial financial and operating pressure. Fretter closed redundant stores where the combined group had overlapping locations, assumed Silo’s debt, and lacked sufficient liquid assets to support the enlarged organization. Management considered rebranding the combined operation as YES!, short for “Your Electronics Superstore,” but the proposed identity was not rolled out across the chain. Stores continued operating under the Fretter, Silo, Fred Schmid, DASH Concepts, and other existing names. Fretter entered Chapter 11 bankruptcy, after which many locations were closed. Silo stores were shut by 1995, and all remaining Fretter stores had closed by May 1996. The brand is therefore defunct, although its advertising style and role in Detroit-area retail history remain associated with the era before national electronics superstores consolidated the market.

Fretter emerged in the Detroit area during the 1950s under the leadership of Oliver “Ollie” Fretter. It developed as a regional retailer specializing in consumer electronics and large household appliances. The company’s identity was closely tied to its founder, who appeared in local television advertising and presented Fretter as a retailer willing to beat competing prices. His best-known promotional promise offered customers five pounds of coffee if Fretter could not beat their best deal. The unusual guarantee gave the chain a strong local personality and made its advertising more memorable than conventional appliance-retail campaigns. When the offer was invoked, the company reportedly supplied one-pound cans of coffee that had been relabeled as a five-pound quantity. Fretter’s business model combined discount positioning with a structured sales-incentive system. Salespeople were paid through a draw against commissions and received additional spiffs based on profit margin and other incentives. The system did not simply reward the sale of the highest-priced item. Internal price-ending conventions helped identify the expected profitability of products: some endings represented higher-margin merchandise, while other endings were used for advertised products, clearance items, or special orders. Products that competitors did not carry in the same model configuration were particularly useful because customers could not make an immediate model-for-model price comparison. The retailer attempted to substantiate its price claims through external price research. Outside firms compared Fretter’s prices with those of competitors, and the results were made accessible to sales staff through point-of-sale systems. The strategy reflected the company’s effort to compete on price while selling products that could be positioned above the lowest end of the market. However, Fretter did not always communicate this distinction effectively in its advertising. The chain and its competitors frequently sold different model numbers within the same manufacturer brand, making public impressions of price competitiveness difficult to establish. The company also expanded into vehicle-related electronics through DASH Concepts, a smaller chain serving the Detroit and Cleveland markets. DASH installed car audio, vehicle-security equipment, and similar products. Its main warehouse was in Dearborn, Michigan, in the same building as one of Fretter’s stores, linking the installation business to the retailer’s broader electronics operation. The competitive environment changed sharply in the early 1990s. Highland Superstores, a major electronics retailer in the Detroit market, ceased operations in 1993. Best Buy viewed the resulting vacancies as an opportunity to enter markets that had previously appeared crowded by Highland, Fretter, and other regional competitors. Fretter had already been considering a larger superstore format and acquired the employee-owned Fred Schmid stores to extend its reach into Mountain states markets. Corporate offices were moved to Colorado during the integration effort. In 1993, Fretter acquired Silo Electronics, its largest contemporary competitor. Silo had been unable to turn a profit since the 1980s, but the acquisition gave Fretter a much larger store network and an opportunity to challenge Circuit City and Best Buy. Based on the predecessor companies’ prior store sales, the combined business briefly ranked second in the category behind Circuit City and ahead of Best Buy. The apparent scale advantage was difficult to sustain. Fretter immediately began eliminating overlapping locations, and the company also assumed Silo’s debt while operating with inadequate liquid assets. Management explored a new identity, YES!, meaning “Your Electronics Superstore,” but the proposed rebranding was never implemented across the stores. The acquired businesses continued under their established names, including Fretter, Silo, Fred Schmid, and DASH Concepts. The enlarged organization subsequently entered Chapter 11 bankruptcy. Store closures followed, with all Silo locations gone by 1995 and the remaining Fretter stores closing by May 1996. The company’s collapse illustrated the difficulty a regional retailer faced when trying to match the scale, liquidity, and standardized superstore model of rapidly expanding national chains. Oliver Fretter died on June 29, 2014, at age 91.

• 2014

  Oliver Fretter dies

  [1]Fretteren.wikipedia.org

  The founder and longtime public face of the company dies on June 29 at age 91.

• 1996

  Fretter ceases retail operations

  [1]Fretteren.wikipedia.org

  All remaining Fretter stores close by May, ending the brand’s retail presence.

• 1995

  Silo locations are eliminated

  [1]Fretteren.wikipedia.org

  All Silo Electronics stores close during Fretter’s post-acquisition retrenchment and bankruptcy-related restructuring.

• 1993

  Fred Schmid stores are acquired

  [1]Fretteren.wikipedia.org

  Fretter acquires the employee-owned Fred Schmid chain, expanding its presence into Mountain states markets.

• 1993

  Silo Electronics is acquired

  [1]Fretteren.wikipedia.org

  The Silo acquisition expands Fretter’s store network and temporarily makes the combined company one of the largest electronics retailers in the United States by predecessor-store sales.

• 1970

  Founder-led television advertising becomes prominent

  [1]Fretteren.wikipedia.org

  During the 1970s and 1980s, Ollie Fretter becomes a familiar Detroit-area advertising spokesman through price-beating commercials.

• 1950

  Fretter is founded in the Detroit area

  [1]Fretteren.wikipedia.org

  Oliver “Ollie” Fretter establishes the electronics and major-appliance retailer during the 1950s.

Discount-oriented consumer-electronics and appliance retail, supported by price-comparison marketing and locally recognizable advertising.

• Home appliances

  Major household appliances

  Fretter’s core assortment included major household appliances sold through its regional retail stores. The chain positioned itself as a low-cost seller while also carrying higher-end products than some competing discount retailers. Because appliance retailers often stocked different model numbers from the same manufacturers, Fretter relied on price research and sales guidance rather than only direct public model comparisons.

• Electronics

  Consumer electronics

  The retailer sold televisions, audio products, and other consumer electronics. Fretter competed with regional and national electronics chains through discount-oriented marketing, while its sales system emphasized margin, product availability, and models that were not always directly comparable with those carried by competitors.

• Mobile electronics and installation

  DASH Concepts installations

  DASH Concepts was a smaller Fretter-owned chain serving the Detroit and Cleveland areas. It installed car audio, vehicle-security equipment, and related mobile-electronics products, extending Fretter’s business beyond home appliances and conventional store sales.

• 1970Five pounds of coffee price guarantee

  Detroit area

  Ollie Fretter’s television commercials promised customers five pounds of coffee if the retailer could not beat their best competing deal. The offer used humor and a highly personal founder-led presentation to reinforce Fretter’s discount identity.

  Outcome. The campaign became one of the chain’s most recognizable local advertising devices during the 1970s and 1980s. On occasions when the guarantee was triggered, Fretter reportedly distributed relabeled one-pound coffee cans.

  Source

• 1993

  Acquire Fred Schmid storesM&A

  Background

  Fretter was seeking a larger geographic footprint and a way to respond to the emerging electronics-superstore format.

  Action taken

  The company purchased the employee-owned Fred Schmid chain and temporarily moved its corporate offices to Colorado to oversee integration.

  Aftermath

  The acquisition gave Fretter stores in Mountain states markets, but the enlarged organization later faced integration and liquidity pressures.

  Source

• 1993

  Acquire Silo ElectronicsM&A

  Background

  Fretter aimed to compete with larger national retailers, especially Circuit City and Best Buy, by expanding its store base.

  Action taken

  Fretter acquired Silo Electronics, a major competitor that had not been profitable since the 1980s.

  Aftermath

  The combined company briefly ranked among the largest electronics retailers by predecessor-store sales, but Fretter closed redundant locations, assumed Silo’s debt, and ultimately entered Chapter 11.

  Source

• Propose the YES! superstore identityStrategy

  Background

  After the Fred Schmid and Silo expansion, management sought a unified identity that could present the group as a national-style electronics superstore.

  Action taken

  Fretter proposed the name YES!, an abbreviation of “Your Electronics Superstore.”

  Aftermath

  The identity was not implemented across the store network, which continued to use Fretter, Silo, Fred Schmid, DASH Concepts, and other existing designations.

  Source

• Enter Chapter 11 bankruptcyOther

  Background

  The Silo acquisition increased the company’s obligations, while Fretter lacked sufficient liquid assets and faced the challenge of consolidating overlapping stores.

  Action taken

  Fretter sought protection under Chapter 11 and began closing locations.

  Aftermath

  All Silo stores closed by 1995, and the remaining Fretter stores closed by May 1996.

  Source

1. 1Fretteren.wikipedia.org