Family-run appliance store still hums

By Susan Chandler | May 24, 2002
Tribune staff reporter

He didn't have the wheeler-dealer salesmen of Polk Bros. He didn't have Fretter Inc.'s advertising clout or Silo Inc.'s two dozen free-standing stores around Chicago.

But Bob Abt of Abt Electronics and Appliances has outlasted them all.

With only one store in north suburban Morton Grove, Abt has thrived in a business where cutthroat pricing and poor customer service have driven a bevy of rivals into bankruptcy or oblivion.

But now, the 66-year-old store is facing fiercer competition than ever. Retail giants Home Depot and Wal-Mart Stores Inc. are expanding into the appliance business, which is dominated by Sears, Roebuck and Co., while Best Buy and Circuit City are duking it out on the consumer electronics side.

Bob Abt's sons Mike (clockwise from left), Billy and Ricky work in the business started by grandmother Jewel (center) and her husband, Dave Abt, in 1936. The original Logan Square location sold radios, washers and dryers.

Far from being intimidated, Bob Abt is raising the ante again.

Abt (incorrectly referred to as A.B.T. by most Chicagoans) will close its Morton Grove store and warehouse on Saturday night and open Sunday morning in its new, much larger store at 1200 N. Milwaukee Ave. in Glenview.

At 350,000 square feet, more than twice the size of its current space, the new store and warehouse will be one of the largest in the country, rivaled perhaps only by Ikea's megastores from Sweden.

Even Abt's giant fish tank, a favorite with children, is expanding. So is the parking lot, which will accommodate 1,000 cars.

"They're one of my absolute, all-time favorite retailers in the whole world. They're so good at what they do," says George Whalin, president of Retail Management Consultants in San Marcos, Calif. "I'm astonished they do as well as they do in a marketplace dominated by companies so much bigger and more powerful."

Bob Abt's explanation is more curt, in keeping with his no-nonsense style. "We just work at it. We do the work ourselves and try to keep control of it."

A crew works Tuesday on the atrium of Abt's new building. The 350,000-square-foot store is set to open Sunday.

The secret to Abt's success is really quite simple, retail experts agree. Abt's salespeople are knowledgeable and courteous, offering assistance soon after shoppers walk in the door.

They're empowered to do what it takes to close a deal, even if that means throwing in an inexpensive microwave to sell an $8,000 top-of-the-line oven that the manufacturer won't allow Abt to cut the price on.

To help customers remember their salesperson and to make the store seem friendly, everyone at Abt wears a sweater embroidered with their first name and the name of a town.

Bob Abt's sweater reads Des Moines even though it's not where he grew up. He's a Chicago kid through and through. Iowa is where he attended college for several years at Drake University before finishing his business degree at the University of Florida.

Reasonable requests' honored

On the back end of a sale, Abt delivers promptly and is quick to take back merchandise that has been damaged in shipping. It also repairs what it sells. Signs prominently displayed around the store say it all: "The answer is `yes' to any reasonable request." They're signed `Bob Abt.'

A 12,000-gallon fish tank is set up in the video recorder section of Abt Electronics and Appliances' new building on Milwaukee Avenue in Glenview.

But it's not just reliance on traditional retail values that has kept Abt alive. The company has been quick to pounce on trends, such as the growing demand among amateur cooks for professional quality stoves.

"Bobby Abt and his team are always thinking ahead of how to reach customers," says Dick Hemp, senior vice president of sales for Maytag appliances, one of the first brands Abt carried. "They are change agents. They execute new ideas."

As he has gone about building his business, one of Bob Abt's role models has been tony Neiman Marcus Group, which has a top-notch reputation for pampering customers and offering high-quality, exclusive products. Abt actually likes to think his company is the Neiman Marcus of appliance retailers.

That may sound like a bold claim, but Abt's product mix backs it up.

An upscale kitchen vignette in the old store features a Gaggenau oven for $4,779. Nearby, a Wolf range priced at $7,598 tempts serious at-home cooks, while a Sub-Zero wine cooler calls out to oenophiles who can afford $5,000 to keep their Pinot Grigio and Beaujolais chilled at different temperatures.

Such elite brands usually are only found in high-end kitchen boutiques, and Bob Abt had to fight hard to get some of them onboard years ago. But his store and Internet site does such high volume that the convincing stage is long over.

"We like what they do," says Paul Leuthe, corporate marketing manager for Sub-Zero, a maker of high-end refrigeration products in Madison, Wis. "Our appliances are built in, and the folks at Abt do a good job of displaying our products as they should be displayed. Some retailers don't take that extra step. They line everything up against a wall and sell it as a commodity."

Loyal customers

On a recent Monday morning, Abt's Morton Grove store is buzzing with customers shopping for everything from big-screen TVs to camcorders. Dick and Janet Slater drove an hour and a half from their new home in Woodstock to look for a new refrigerator.

"It's just a great operation. They're hands on," says Dick Slater. "There will always be service-related issues. If there's a problem, they're quick to come out and correct it."

Because of how they've been treated, the Slaters in the last 10 years have bought at Abt kitchen appliances, TVs, two sets of washers and dryers and a satellite TV system.

That's a sharp contrast with Jean Marie Milligan who was shopping at Abt for the first time. Milligan drove from west suburban Lombard on the recommendation of her father.

"He just thought the service was great and prices were good. We thought we would check it out," she says.

Indeed, some people travel 100 miles to shop at Abt.

"It's almost not a single store," says Neil Stern, partner with Chicago retail consultant McMillan/Doolittle. "It's one of those stores that is a marketwide phenomenon. The trade area of the store is enormous. They have the upper end of the market cornered."

Sales estimate is $125 million

Because Abt is family-owned, it doesn't provide annual sales figures. However, Dun & Bradstreet, the credit rating agency, estimates Abt's sales at $125 million a year, an impressive figure that translates into $4,629 per selling square foot, putting Abt in the forefront of the retail industry. Of course that number is somewhat overstated because of Abt's Internet business. Still, it compares quite favorably with appliance sales leader Sears, which racked up $319 per selling square foot in 2001.

If there was a recession last year, Abt didn't notice. Sales rose about 20 percent in 2001.

Bob Abt and his 950 employees are planning to do even more business at the new site. A dramatic atrium will feature high-end products such as Bang & Olufsen audio products and $60,000 Krell amplifiers. A culinary shop will display a pots and pans line by Viking, while a model kitchen will focus on a $20,000 Aga stove, which weighs more than half a ton.

That's a far cry from the radios, washers and dryers sold at the first Abt store, which opened in Logan Square in 1936.

Bob's parents, Jewel and Dave Abt, struggled in the early years, unable to get many appliances because the country's manufacturing plants were converted to war use. But they survived on the repair business, which boomed because of the shortages.

"They always made a profit," Bob Abt says.

Abt made a smooth transition to the second generation when Bob took over after a post-college stint at Goldblatt's department stores. Now, with Bob coming up on his 65th birthday, Abt Electronics is on the verge of another generational transition.

Company employs all 4 sons

All four of his sons are involved in the business, almost ensuring the company will remain family owned. Michael is president and the financial guru. Ricky handles customer service and deliveries, while Billy oversees marketing and advertising. The latest to join the fold is Jon, who spent about five years working for Internet companies in California. Logically enough, he is in charge of Abt's thriving Internet operation.

Bob Abt says managing his sons is "the hardest thing of all," and he worries about what could happen when he is no longer Abt's patriarch. "At the moment, they get along. When I depart, who knows?" he shrugs.

While he has no definite plans to retire, Bob Abt would like to work less in about a year when the new store is running smoothly. But for now, he continues to work long hours at the store and even monitors customer service calls while driving around in his car.

Will Abt ever fall victim to the woes that brought down so many of its competitors? Bob Abt is philosophical.

"If we don't get better and better, we could fail too," he says. "But if we keep working at it, we'll be OK."