News of a possible third-coming of Circuit City this summer has received mixed reactions from some veteran tech dealers.
Speaking from hard-earned experience, a trio of CE retailers slugging it out in the tough New York, Dallas and L.A. markets had two words for the nascent business: good luck.
Daniel Pidgeon, chairman of Dallas-based Starpower and a Consumer Technology Association (CTA) board chairman, questioned whether the Circuit City name will still resonate with the company’s target millennials.
Moreover, the new management team of Ronny Shmoel and Albert Liniado are facing “a very challenging marketplace” for brick-and-mortar CE retail, he said.
“Anyone entering the marketplace must be able to provide something beyond low price, nice stores, good service and unique products,” noted Pidgeon, whose hometown was tapped for the first new Circuit City store. “They will certainly need more than a ‘better mousetrap’ to be successful.”
Vendors are also keenly sensitive to how their brands are represented and sold, he added, necessitating extra care if the new owner is to retain top-tier product lines.
Indeed, Circuit’s business model calls for vendor-specific web pages and branded sections within franchised and corporate-owned stores. The team is also looking to lease turnkey in-store shops stocked with private-label merchandise to non-CE retailers, based on the lure of the Circuit brand.
Liniado’s former partner, DataVision principal Jimmy Garson, whose 23rd Street New York showroom resembles Circuit City’s store concept, echoed Pidgeon’s cautionary advice.
“Retail is not what it’s about — it’s all about online,” he said. “It’s also hard to open in a distant market; I wouldn’t open outside New York. I wish them luck.”
Tom Campbell, corporate director of SoCal’s Video & Audio Center (VAC), welcomed the new addition, which could help lend greater visibility to the industry.
“It’s good to see another player enter the market,” he said. “They’ve got a good shot at this. It concerns me when I see companies disappear.”
But while he believes the Circuit City name remains relevant to digital technology (“It’s timeless”), the small retail format Shmoel has chosen is not.
“They have a huge challenge,” Campbell observed. “I’m not sure people will want to walk into a RadioShack[-sized] store, even with different merchandise. The stores should be a medium-size box.”
Whether the new Circuit City will find its niche, present a compelling value proposition and prove naysayers wrong remains to be seen. As Starpower’s Pidgeon noted, “If their concept is more than just a convenient and nice place to shop, they can possibly succeed. If not, they face an arduous journey.”