Leung makes good call on Wireless Zone partnership

WELL CONNECTED: Ray Leung is president of CRMS Inc., which owns 12 Wireless Zone stores, including four in Rhode Island. At right is Leung, at the Taunton Ave. Wireless Zone store in East Providence, with store manager Brad Lavoie. / PBN PHOTO/ MICHAEL SALERNO
WELL CONNECTED: Ray Leung is president of CRMS Inc., which owns 12 Wireless Zone stores, including four in Rhode Island. At right is Leung, at the Taunton Ave. Wireless Zone store in East Providence, with store manager Brad Lavoie. / PBN PHOTO/ MICHAEL SALERNO

Selling pagers from a small store in Randolph, Mass., 21 years ago, Ray Leung couldn’t have imagined the iPhone 6. Back then, phones had yet to become smart and the introduction of new models had not become global events.
Now business at Leung’s 12 Wireless Zone mobile-phone stores revolve around the latest smartphone releases from Apple, Samsung and their competitors.
This fall when the iPhone 6 came out, Leung’s stores in Rhode Island and Massachusetts went into overdrive with customers waiting outside before opening.
“The product launch is an extra 25-40 percent boost in business, especially the iPhone,” said Leung, owner of CRMS Inc. “We had a good amount of people waiting outside.”
In a telecommunications marketplace featuring electronics heavyweights and phone-carrier behemoths, Leung and fellow retail franchisees are often the little guys stuck in between.
Verizon, whose wireless service his stores sell, has its rules about how its products must be sold.
The Connecticut-based Wireless Zone franchise has its own say in the strategies of its franchisees.
And of course phone makers, particularly Apple, lay down strict parameters under which their devices can be sold, especially price.
Despite all the control those powerful interests have in their business, mobile-phone store owners still have opportunities for growth.
Earlier this year Leung, who lives in Cumberland, purchased four East Bay Rhode Island stores to go with eight in Massachusetts, making him the largest franchisee in the Wireless Zone chain.
Three of those new stores, in Barrington, Bristol and Portsmouth, Leung said were underperforming and he intends to move to better locations.
He already has a new Barrington space picked out in the Barrington Shopping Center on County Road and is searching for new spots for the Bristol and Portsmouth stores.
The fourth and largest store, a 2,400 square-foot location on Taunton Ave. in East Providence, he intends to leave where it is.
In the current mobile phone market, with competition coming from a wide range of sources – from big-boxes to the Apple store and direct Internet sales – Leung said growth is actually essential for anyone looking to maintain their current position.
Margins in the mobile-phone business have shrunk so much for the retailers, and manufacturers have such control over price, that adding volume is a necessity.
“Competition is so fierce, I have to grow,” Leung said. “The more stores the better. If I didn’t have as much competition, I wouldn’t need as many. Now I have to make up in volume what is gone in margins.”
After roughly three years selling pagers, Leung first started working with the company that would become Wireless Zone in 1996 when it was still called The Car Phone Store. Even then cellphones were rendering car phones obsolete, and the franchise changed its name to Wireless Zone in 1999.
Leung’s first Car Phone Store location was on Route 9 in Framingham, Mass., and he has since moved south of Boston into Bristol County, Mass. He had a successful store in the Emerald Square mall in North Attleboro and now has moved into Rhode Island.
At the beginning, mobile franchises were rare, with most retailers being corporate owned, but that changed in the 2000s as the mobile market grew. Wireless Zone handles marketing for its franchisees and orders the phones from manufacturers.
Most importantly in a business where inventory is expensive, the franchise provides the upfront capital to buy the latest merchandise.
“If I had to run everything myself, with the amount of phones we purchase, I would have to secure a $15 million to $20 million line of credit,” Leung said.
As the industry evolves, Leung said the biggest threat to retailers like him are direct online sales, which have already cut significantly into the brick-and-mortar market.
Stores, in turn, have gotten larger and moved into more premium shopping centers.
With the intense attention paid to its products and theatrical product releases, Leung said Apple changed how phones are marketed and has become its own phenomenon in his business.
The company keeps the margins low for retailers and is the most controlling of the manufacturers, but demand for its products makes up for it and shows no signs of slowing.
For his stores, Leung said the launch of the iPhone 6 was actually the second- biggest Apple release ever, trailing only the original for interest. •

COMPANY PROFILE
CRMS Inc.
OWNER: Ray Leung
TYPE OF BUSINESS: Mobile phone retail
LOCATION: 575 Taunton Ave., East Providence
EMPLOYEES: 44
YEAR ESTABLISHED: 1996
ANNUAL SALES: WND

No posts to display