TigerDirect Defanged

Liquidating chain leaves spotted legacy
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As RadioShack receives a new lease on life, a chapter closes on another less-storied technology chain.

Systemax, the IT supplier, announced last month that it was getting out of retail in order to focus on its more lucrative B-to-B, education and government operations.

As part of the process, the company is closing 31 of its 34 TigerDirect stores and one of two distribution centers, and is also dismissing staff at its divisional headquarters in Miami. Gordon Brothers is conducting the liquidation, and most of the fleet will be shuttered by June.

“This was a difficult decision,” chairman/CEO Richard Leeds said, “but one that reflects the opportunity we see in the B-to-B marketplace as well as the realities of how the consumer market has changed over the past few years.”

Adding to the sense of closure, the announcement came one week after TigerDirect’s co-founders, brothers Carl and Gilbert Fiorentino, began serving sentences of six-and-a-half and five years, respectively, for taking millions from suppliers in bribes and kickbacks.

The scam cost Systemax at least $27 million in higher supply costs, federal prosecutors said, and mirrored other shoddy business practices like withholding customer rebates, selling discontinued products under warranty as new, and allegedly altering shoppers’ online reviews.

Gilbert, who ran Systemax’s retail operations after it acquired TigerDirect in 1996, also failed to make a go of his bankruptcy-sale purchases of CompUSA and CircuitCity.com.

He did, however, bring innovation to the CompUSA showrooms through a farsighted system of interactive, web-based displays that provided product information and feedback on shopping behavior.

The innovation continued in the final months of the chain as the company opened a prototype connected-home department that set the standard for presenting, demonstrating and merchandising the category at retail.

Systemax also staged an annual stadium-sized consumer tech show to help stir the CE pot, but eventually resorted to kitchen-sink merchandising – luggage, bedding, wall safes, home fashions, pool supplies – as retail sales continued to wane.

In the end, this tiger leaves behind a website, three stores, and a spotted legacy.

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