John Amistoso understands that when it comes to the appliance business, its better to be the hunter than the hunted.


The owner of Freds Appliance Inc., who also is an avid big-game hunter, has transformed a mom and pop operation into a burgeoning empire that boasts millions of dollars in annual sales and continues to expand in the Inland Northwest.


My father just shakes his head in awe, Amistoso says. He cant believe it.


Amistoso has used his entrepreneurial skills to take aim at other appliance vendors.


At one point, Sears had 54 percent of the market share; they dont anymore, he says. Weve taken market share from other vendors and grown.


The company, which operates three stores in Spokane and one in Coeur dAlene, plans to open two new stores in Spokane Valley later this year to take advantage of explosive growth in the Spokane-area housing market, Amistoso says. A record number of homes sold in Spokane County in 2004 for the second year in row, driving strong demand for businesses that supply that market.


Freds Appliance recently agreed to lease about 8,000 square feet of floor space at 10169 E. Sprague, which formerly housed a Walkers Furniture store. Freds Appliance expects to open an outlet there in March and also is looking to buy property for a second store in the Valley, Amistoso says. He declines to say where that store might be located.


Freds Appliance employs about 60 people, but expects to hire about 10 more for its first Valley store, and likely will hire another 10 for its second Valley store, he says.


The companys revenues were $16.5 million last year, up 20 percent from the year before, and he projects sales of nearly $20 million this year.


I believe our increase is due to the growth in Spokane, Amistoso says. If we put on the same growth, next year will be right on target.


About 70 percent of Freds Appliances sales occur at its retail stores. The rest stem from contracts it has secured with homebuilders, government agencies, and universities to provide appliances.


The company serves a host of developers, including Greenstone Corp., Hallmark Homes Inc., Sullivan Homes Inc., Condron Construction Inc., and Lanzce G. Douglass Inc., to supply and install appliances in the homes those companies build. Freds Appliance has supplied many of the homes in the big subdivisions here and in North Idaho with ranges, exhaust hoods, microwaves, and dishwashers.


To help meet that demand, Freds built a 33,000-square-foot warehouse last year at 2524 N. Dakota, in North Spokane.


If a builder calls and needs 30 appliances in homes, we can get it done the same day, Amistoso says. By having the infrastructure in place, we can meet larger orders.


Freds also has appliance contracts with Fairchild Air Force Base and other federal agencies that operate housing projects here, Amistoso says.


Were the only one big enough to fulfill those contracts, he asserts. Price isnt the issue with those government contracts; its the fact that we can deliver.


Amistoso is guarded when hes asked about the companys market share, but says its far greater than it was 20 years ago.


His parents, Fred and Bev Amistoso, founded the business in 1962, and he bought the company from them in 1984. He had worked for his parents in sales. At that time, Freds Appliance had one location, employed 10 people, and had annual revenues of about $500,000, Amistoso says.


After John Amistoso bought the business, it grew slowly at first as he learned the ropes. He says he always had big plans, including to secure sales contracts with homebuilders and federal agencies. He also wanted to sell high-end appliances.


I was very aggressive, he says. I pushed for the high-end appliances and the building contracts.


The marketplace here changed during the 1990s when national and regional retailers opened stores, Amistoso says. He says that chains such as Smiths Home Furnishing Inc., which is now gone; Circuit City Inc.; Home Base Inc., which also is gone; and Home Depot Inc. helped drive smaller operations out of business.


Amistoso was determined not to let that happen to Freds Appliance. The company adopted an aggressive strategy to expand and market the operation, and it was one of the few independents here to survive, he says.


Honestly, we weathered the storm of big boxes during the 90s, he says. Most of the small independents in Spokane went out of business.


The glut of new appliance dealers also resulted in several of the large chains scaling back their operations, and others, such as Home Base and Smiths, closing their doors.


Amistoso says his company took a few trophies along the way. Freds Appliance bought the inventories of some of its former competitors, including Smiths, when they failed.


It was very satisfying when we bought Smiths inventory, he says. That felt good.


The keys to beating big-box stores are speed, selection, and service, Amistoso says.


Freds offers a wide range of brands, including Whirlpool, Frigidaire, Maytag, Amana, and KitchenAid. It also carries high-end brands such as SubZero, Bosch, and Dacor, Amistoso says.


In addition to carrying more expensive products for affluent buyers, the business attempts to cater to people on a budget. It operates a pair of ding and dent stores here that sell appliances that have been damaged only cosmetically, he says. It also offers financing and rent-to-own arrangements to customers.


Freds also services appliances sold by Home Depot and Lowes Cos. Inc., and has service contracts with General Electric and Whirlpool.


Why do we do that? he says. Because the customer is going to think back how hard we worked to get their problem fixed, and where do you think you theyll buy their next appliance?


Freds Appliances marketing strategy includes TV, radio, and print ads designed to reach both high-end and low-income customers.


We want Freds Appliance to be the first or second name people think of when theyre looking to buy an appliance, says Amistoso. The reality is that consumers visit an average of 1.5 stores when theyre shopping. People think consumers shop around, but they dont.


The companys sales staff is trained to sell to both high- and low-income customers, he says.


A high-end customer can easily spend $30,000 on appliances, but the very next customer might only spend $500, he says. Our staff has to be flexible and know the products.


The company has stores in Spokane at 2525 N. Monroe, 2601 N. Monroe, and 3117 N. Division. It also operates a store at 6235 Sunshine Street, near the Silver Lake Mall, in Coeur dAlene.


Freds Appliance is preparing to move its Coeur dAlene store into the former Rosauers Supermarkets Inc. building at the corner of U.S. 95 and Appleway, in March. It will lease about 9,000 square feet there.


Amistoso says hes not interested in expanding the business outside of the Inland Northwest


I think thats when you lose control of the business, he says. I have enough to keep me busy, and I like to able to put my hands on it.