But is there room for another consumer electronics chain when there’s barely room for the few we have left?
Shoppers leave a Circuit City outlet running a store closing sale in Greensboro, North Carolina, U.S., on Sunday, Jan. 25, 2009. Circuit City Stores Inc., the bankrupt consumer-electronics retailer, is in the process of shutting down its U.S. stores and firing more than 30,000 people. Photographer: Jim R. Bounds/Bloomberg News
Ronny Shmoel and Albert Liniado, a couple of retail veterans, have bought the brand, domain and trademarks and have big plans for Circuit City, according toTwice, an electronics and technology industry trade magazine. The two hailed from RadioShack and DataVision Computer and Video respectively, and the plan to bring back Circuit City has many of the same elements as a plan hatched by RadioShack executives long-ago.
There will be retail stores. The first is planned for June in Dallas. It will be less than 4,000 sq. ft. with an assortment of mobile devices, headphones, fitness trackers, gaming gear and other products aimed at gadget lovers.
The goal is to open between 50 to 100 company-owned stores by 2017.
More ambitiously, there are plans to create smaller kiosks or shops that could be added to existing retail operations such as convenience stores, college bookstores and pharmacies… basically any place that could benefit from a selection of gadgets that appeal to Millennials.
There will also be an e-commerce site and private label products.
Once upon a time, RadioShack had similar plans. Kiosks selling mobile phones were deployed to discount stores and membership clubs, and there were contracts with college stores to create those very departments aimed at young technology buyers
According to Twice, the plan is to create a strong branded presence for the brands being offered with dedicated Web pages similar to online marketplaces like Jet.com.
“The vendors were very excited,” Shmoel told Twice. “We want to become best partners with them. Brands have become diminished in lieu of price, and consumer education has worsened with the growth of the Web.”
Circuit City filed for Chapter 11 bankruptcy protection in November 2008. It was terrible timing, right before the holiday season. If the chain wasn’t in enough of a precarious financial position, the filing did little to help. Consumers weren’t confident that stores would around come the new year, and people paused before buying gifts there.
Even worse, lenders forced the retailer to re-evaluate its inventory and reduced prices based on the filing. Circuit City didn’t make it very far into the next year. On Jan. 16, 2009, the retailer announced plans to liquidate.
In those few weeks between Chapter 11 and the end, vendors and private equity attempted to keep the company on life support. In fact, vendors had been helping defray costs for the chain for quite awhile, according to people close to the company at the time.
Because one less retailer meant allocating more power to the remaining merchants, who negotiate lower prices and better terms to benefit themselves.
Consolidation isn’t good for consumers and it isn’t good for the folks who make the products either. Today, Amazon, Best BuyBBY +3.70%, TargetTGT +2.78% and Walmart are selling the bulk of electronics, while smartphones are sold largely through carrier- owned stores. It’s a bad marketplace for the folks who make the hardware and that just might help give Circuit City a boost.