April 13th, 2009
Systemax: Where bankrupt electronics retailers are resuscitated
Systemax already has CompUSA in its stable and now it may add Circuit City too.
You could call Systemax a collector of defunct retailers. And why not? It is acquiring some brand equity on the cheap. Systemax makes and sells electronics and acquired the CompUSA brand last year.
According to bankruptcy filings, Systemax is also buying Circuit City assets for $6.5 million, reports the Associated Press. As part of the deal, Circuit City would get a slice of CircuitCity.com revenue from Systemax for two and a half years. Other companies may bid on Circuit City’s intellectual property in May if all goes according to plan.
What does Systemax get out of the deal? More distribution. The company owns Tiger Direct and by tweaking the CompUSA business model (it has even resuscitated a few stores) it has more storefront for its wares. If it adds Circuit City it would have another brand that consumers would at least give a try.
Systemax has been building out CompUSA by adding a B2B sales team last month, opening stores and building out the executive team. In December, Systemax revamped CompUSA’s strategy to focus on “Retail 2.0″ with a concept store in Miami.
In the new CompUSA stores, customers can research products online and then buy in-store. The general idea is to provide all the information available to CompUSA customers and round it out with employees’ expertise.
Last week, Wired did a good overview of the Systemax strategy with CompUSA. It’s unclear whether this approach will work, but the upfront investment is low enough to justify a little CompUSA reinvention. Can Systemax do the same with Circuit City?
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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