The consumer electronics and home appliance industries have demonstrated strong growth, driven by new product innovations, particularly in the premium categories. According to the CEA and the Association of Home Appliance Manufacturers, or AHAM, U.S. consumers spent a combined total of $164.5 billion on consumer electronics and home appliances during 2006, representing an increase of 12.3% from 2005.

According to the CEA, sales of consumer electronics increased at a CAGR of 10.3% from $98.4 billion in 2002 to $145.7 billion in 2006 and are expected to grow by 6.5% in 2007 to $155.2 billion. Demand for consumer electronics products is expected to remain strong due to the continued adoption of digital and more portable products along with continuing trends of price declines for high ticket items, such as flat-panel televisions. According to the CEA, unit sales of digital products, including digital televisions and displays, MP3 players, digital cameras, personal computers, DVD players and recorders, portable CD equipment, PDAs and portable navigation devices, grew at a CAGR of 19.6% over the past five years.

According to the CEA, sales of digital televisions were expected to climb to $23.3 billion in 2006 from $17.4 billion in 2005 representing an annual growth rate of 33.9%. Similarly, volume shipments were expected to grow to 18.7 million units in 2006 from 12.3 million in 2005 representing an annual growth rate of 52.0%. This implies a trend of declines in average selling prices of digital televisions which is fueling demand for larger screen size units as they become relatively more affordable to more consumers.

The major household appliance industry is influenced by a combination of economic, demographic, and lifestyle patterns. In a strong economy, evidenced by growing GDP and personal consumption expenditures, consumers often upgrade and purchase more luxury appliances. According to AHAM, U.S. consumer spending on major appliances reached $19.5 billion in 2006 despite a housing slowdown, representing an increase of 7.1% over 2005. According to AHAM, unit shipments of washers, dryers, dishwashers, refrigerators, freezers and ranges, are expected to increase by 1.8% in 2007 to 48.7 million units.

The Company’s typical new store averages 30,000 square feet. The Company’s stores are designed to be visually appealing to its customers and to highlight its premium selection of consumer electronics and appliances.

The Company’s stores are located in power centers or freestanding locations in high traffic areas. The Company drives store traffic and enhance its brand recognition through year-round television advertising, weekly newspaper inserts, direct mail and web promotions.

The Company offers a broad selection of the latest video products, such as LCD, plasma and micro-display televisions as well as DVD recorders. Representative brands include Hitachi, JVC, Mitsubishi, Panasonic, Philips, Samsung, Sharp, Sony and Toshiba.

The Company offers a broad selection of major appliances, including the latest generation refrigerators, ranges, dishwashers, freezers, washers and dryers, sold under a variety of leading brand names. Representative brands include Bosch, Frigidaire, GE, KitchenAid, LG, Maytag, Subzero, Thermador, Viking, Whirlpool and Wolf.

The Company also sells audio products, Serta mattresses, notebook computers and other select popular consumer electronics and accessories. Additionally, the Company provides its customers with a suite of services including ESPs, same-day delivery and installation and in-home repair and maintenance.

Products such as home audio systems, notebook computers, cameras, telephones, satellite dish network systems and advanced cables generate and support store traffic and create cross-selling opportunities with the Company’s other products.

Other expense declined to $13.1 million for the nine months ended December 31, 2006 from $14.3 million for the nine months ended December 31, 2005.