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Circuit City Stores Returning?
The days of calling Circuit City a defunct big-box "store" might be coming to an end.
Systemax, which purchased the Circuit City brand in May 2009 and relaunched the company online, is "contemplating a brick-and-mortar rebirth," according to Dow Jones Newswires.
Systemax bought and revived CompUSA, one of many failed electronics retailers, and now plans to open stores in Houston, Chicago and other major markets after successfully testing stores in Florida. There currently are 34 CompUSA stores.
Could Circuit City follow the same plan?
"Recession hurts, but it also creates opportunities that would not have existed otherwise," said Systemax Chief Executive Richard Leeds. "We have a tremendous amount of excitement around our company now because of these acquisitions. We picked up two iconic retail brands for well under $50 million. That to me is the bargain of the century."
Would Circuit City stores be successful?
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5 Comments (displayed in order by date/time)
A lot (perhaps even most?) of those old CC locations are still sitting vacant and I suspect Systemax could negotiate some awesome deals with their landlords. The one nearest me even has the logo on the building. Most are in good retail traffic locations but they’d have to completely redo how the stores are merchandised and significantly retool their entire marketing & sales philosophies in order to compete and succeed. This will be an interesting one to watch.
I agree with isf4hd, but if they look at all like the CompUSA in my neighborhood ... be ready to see another bankruptcy.
With debt obligations removed (thanks, bankruptcy) and retail leases renegotiated (thanks, economy) their expenses will likely be much lower. These stores could be profitable with significantly less revenue than the previous incarnation of the chain. Or they could leverage the lower expense structure to grab market share by reducing their margins. I wouldn’t count them out at all.
What’s really funny, is that here in Houston they just opened a CompUSA in a new Circuit City location that was scheduled to open a few weeks after the shutdown.
Every TV was hooked up to a computer and was being used as a multi-media display. Kind of interesting idea, but expensive to do on a large scale. Also, it seems to keep the staff level down, kind of a figure-it-out-yourself way of doing things.
I think the reason Circuit City failed in the first place is twofold: first, the shopping experience there simply wasn’t enjoyable. It was hard to find what you wanted, and the store visually never matched the experience or logical layout of a Best Buy. Second, they often didn’t compete well in pricing with a Best Buy or Wal-Mart or even Target. There is always room for another big-box electronics retailer, but they need to give the customers a reason to come in and shop.