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Last December Nobody Beats the Wiz, the Carteret-based consumer electronics retail giant with estimated sales of $1.2 billion, did something unusual. Having designed its own ads for 20 years, the company hired Bozell Worldwide--the New York City agency that masterminded the famous campaign showing celebrities with milk moustaches--to handle its advertising. Bozell was delighted to land the Wiz account: The company's annual ad billings are a reported $88 million. Lawrence Jemal, president of Nobody Beats the Wiz, said at the time: "We needed a new marketing partner to help us reach the next level."
Today, however, more is at stake for Nobody Beats the Wiz than just reaching the next level: The company is fighting to stay at its present level in the face of intense competition and flagging sales. As rivals like Minnesota's Best Buy and Virginia's Circuit City move aggressively into this region, Nobody Beats the Wiz is under attack. The assault comes at a time when the $65 billion consumer electronics retailing business is weak. Most consumer electronics retailers had a blah Christmas, and January was no better. Says Terence J. McEvoy, an analyst at Janney Montgomery Scott in New York City: "The market is very difficult. Consumer demand is weak, and we haven't seen any hot new products."
These factors alone would have been enough to make 1997 a tough year for Nobody Beats the Wiz. But the company faces a greater challenge: dealing with the widespread view that it is caught in a tight cash squeeze. Bloomberg Business News reported in January that some Wiz vendors were shopping for a type of insurance that would...