Turbulent Month For Retailers As Pace Of Change Revs Up - Twice

Turbulent Month For Retailers As Pace Of Change Revs Up

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A planned flagship Microsoft store in Manhattan will mark the contiunuing retail expansion of the hardware and software vendor.

NEW YORK – October’s been a busy month for CE retail and it’s not even halfway over.

Within just the last couple of weeks, Conn’s said it might put itself up for sale; MacMall is preparing to shut its last remaining showroom; and Grant’s Appliances closed its doors to its longtime Chicago customers.

But, at the same time, GameStop broadened its mobile business; Newegg.com opened a new distribution center; Microsoft revealed plans for a Manhattan retail flagship; and Amazon.com was reportedly opening up shop 20 blocks away.

Point being, as individual dealers continue to succumb to the aftershocks of the Great Recession, the overall CE specialty channel remains a vital, evolving cornerstone of the consumer marketplace.

Case in point: GameStop. Besides outfitting its stores with ultra-high-speed broadband to keep its customers engaged (see Showroom story), the company, through its Spring Mobile subsidiary, has snatched up a 53-store chain of AT&T shops that will give it more than a foothold in New York and Connecticut.

The purchase, from independent New York metro area chain Product Center, is the third and largest acquisition for Spring Mobile this year, bringing its store count of AT&T-branded shops up to nearly 300 locations across 26 states.

GameStop acquired Spring Mobile last November as part of its diversification into wireless, in anticipation of waning demand for packaged media. Thanks to its own purchases, Spring Mobile president Jason Ellis was able to describe the company as AT&T’s fastest-growing authorized retail partner, having more than doubled in size over the past 12 months.

For Microsoft, its forthcoming move into Manhattan was “five years in the making,” noted David Porter, the company’s worldwide retail stores corporate VP, following the opening of its first location in Scottsdale, Ariz., in 2009.

Porter said the new shop, which will be built on New York’s tony Fifth Avenue, just blocks from Apple’s signature Manhattan store, will serve as its first flagship location. It will join some 104 Microsoft stores throughout the U.S., Canada and Puerto Rico, plus 10 more that are set to open by the holidays, bucking the trend of most retail forays by vendors.

Ironically, e-tailers are also finding brick-and-mortar indispensable, despite some early dot-com pronouncements. In pursuit of national next- or same-day delivery, Amazon has been on a tear opening up regional distribution centers around the country, and is now reportedly planning a mini-fulfilment center down the street from Macy’s Herald Square.

The new site would hold limited inventory for same-day deliveries within the city; would support returns, exchanges and pickups of online orders; and may also showcase the company’s proprietary Kindle and Fire CE devices, the Wall Street Journal reported.

Newegg too is getting physical, opening its fourth distribution center, this one serving the Midwest. The half-million-square-foot facility will eventually hold 20,000 items and process 12,000 orders a day, resulting in “noticeably shorter delivery times,” the etailer said.

But not everyone is in expansion mode. At press time, Grant’s Appliances, Electronics and More had apparently shuttered its stores after serving greater Chicago for over 80 years following an onslaught of 17 hhgregg locations, and computer reseller MacMall was preparing to close the last of its four showrooms as parent company PCM continues its switch to commercial IT services.

Most surprising was the concession by Conn’s that it would consider selling the business – or at least spinning off its in-house credit operation – in an effort to boost its faltering stock price. The problem stems from said financing unit and the company’s core lower-income customer base, which is struggling to pay its bills.

And, of course, all eyes this season are on RadioShack, which was teetering on the brink of bankruptcy but received a last-minute capital infusion from investors that should be just enough to carry it through the holidays.

The CE saga continues …

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