Redwood, Calif. - Anderson's
TV, the Silicon Valley specialty chain, closed
its doors last month after more than 32 years in business.
The self-described "Big Screen Specialist" succumbed to
plummeting flat-panel prices, compressed margins and the weak economy,
principal Dave Malloy told TWICE.
Malloy had been funding the company with outside resources for
the past 18 months, and earlier this year closed two of its four stores and sold
off its service operation.
"I was trying to find a way to be profitable, but after 16 months
we had a very large cash bleed," he said.
Malloy found it impossible to compete on price with mass
merchants, who now offer a full array of tier-one products, and still provide a
full suite of delivery, installation and repair services, he said.
comp sales were up 80 percent in units, but gross dollars and gross profits
were both down. "Sixty-five-inch plasma was $6,999 before Christmas - now it's $2,999.
I couldn't generate enough volume to stymie the price declines, and it's hard
to make it work on sub-10-point margins," he said.
Compounding the problem was the ailing economy, which is more
acute in California;
higher finance charges amid the credit crunch; and competition from Web-based
retailers, which have an immediate 10 percent price advantage by not collecting
sales tax, Malloy explained.
"It was a wicked combination of events," he said.
Anderson's started as a local gas
station/garage in 1934. Malloy purchased the business in 1978 and built it into
a $44 million, full-service chain with a focus on big screen TVs. The PRO Group
dealer's assortment also included audio, furniture and other home-theater
products. Anderson's TV was No. 87 on the TWICE
Top 100 CE Retailers rankings released in May.
Malloy opted to close shop via an Assignment For Benefit of
Creditors (ABC) rather than Chapter 7 to ensure that his employees, taxes, fees
and creditors would be paid. An assignee, Mountain View, Calif.-based Sherwood
Partners, is presently monetizing the company's assets.
Anderson's closure dovetails with
the shuttering of a more recent competitor, San Carlos, Calif.-based UV
Discount, which operated four stores throughout the San