When a business fails, especially a large scale nation-wide retailer, another business usually steps in to fill the void. Consumers have to consume, and to do so means they go shopping. When it’s a nation-wide electronics retailer like Circuit City that goes under, that void is huge and all too often impossible to fill. Trying to build a nation-wide electronics only retail chain from scratch to replace the bankrupt and shuttered Circuit City stores will only result in failure. The current economy is awash with large numbers of other retailers going over the edge and the situation will not change for the next few years. At it’s peak, Circuit City had almost seven hundred stores and close to forty thousand employees. Duplicating that right now would be insane. And that brings to light the solution to replace the failed giant, regional merchants more attuned to the local needs of it’s customers, and ones that are willing to grow slowly.
Years ago there was an electronics chain in the greater New York metropolitan area named Crazy Eddies. Over a fifteen year span from 1971, the chain grew to forty three stores and is best remembered for it’s television advertising. Using a radio disc jockey, Jim Carroll as spokesman, the ads screamed, “Crazy Eddie, his prices are INSANE”. What was insane was the business practices that the retail chain was employing. The United States Securities and Exchange Commission investigated the owner, Eddie Antar, on violations of federal securitiy laws. Arrested and brought to court on fraud charges, this forced the business into eventual bankruptcy. What was insane was the idea that a local electronics business could grow so quickly and prosper. It took Circuit City sixty years to go coast to coast so, the void that is left by their failure will most likely be filled by local businesses in each major market. It takes time to grow, and you have to look hard at why Circuit City failed before an attempt is made to duplicate such large scale growth.
The big box stores put the biggest bite into Circuit City’s revenues, and the club stores finished them off. Target and Wal-Mart, Costco and Sam’s Club, offer much of the same merchandise as Circuit City and you can walk in one door to do all your shopping. In one you can buy a pair of jeans and a dvd player, in the other some chop meat and a television. Variety is the spice that poisoned Circuit City but, there is a niche for an electronics only store in every American market if they are run properly. One good example in that greater New York area is PC Richard. Currently in it’s third generation of family ownership, it strives to continue doing business the same way it did when it first opened its doors as a hardware store in Brooklyn in 1909, by adhering to family values as a local appliance and electronics store. They call themselves the “Appliance Giant” and use the slogan “Richard is reliable”. The salesmen are just that, salesmen, they work off commissions so they are usually attentive and well versed about the products. And the product line is large, from refrigerators, ranges and air conditioners to digital cameras, telephone systems and outdoor grills. They sell it all, if it has a plug, you can find it at PC Richard.
With the demise of Circuit City, PC Richard is expanding into some of their former locations in New Jersey and Connecticut. In April of 2009, they announced the opening of five new locations in former Circuit City storefronts and a new, second regional distribution center in New Jersey to match the one located on Long Island. They are already moving into the void that Circuit City left behind. With this expansion, they will have fifty six stores throughout the region. The only question, are they going to maintain the same high standard with this expansion, or is this growth a reprise of Crazy Eddie’s, insane? The answer would have to be the former, because in every market that Circuit City did business, a local retailer will have to fill the void.