November 19, 2012, 12:17 PM

TigerDirect will swallow up CompUSA and CircuitCity brands

Two once well-known retail brands will be phased out.

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After the end of the year two once well-recognized retail and e-commerce brands—CompUSA.com and CircuitCity.com—will be no more.

Systemax Inc., which bought both brands through bankruptcy proceedings in recent years, by Dec. 31 will consolidate all of its remaining CompUSA assets, including CompUSA.com, and CircuitCity.com, into its core consumer brand: TigerDirect.com.

In its recent third quarter earnings report, Systemax, No. 25 in the 2012 Internet Retailer Top 500, reported it would take a $34 million pre-tax charge in the final quarter to consolidate all of its North American retail operations, including the store and web operations of CompUSA and CircuitCity.com, under Tiger Direct. CircuitCity.com has been exclusively an online brand since Systemax acquired it in 2009.

"We harvested significant value from the CompUSA and Circuit City acquisitions and are now moving forward with a single and unified consumer platform in the United States that will drive efficiencies in advertising and customer acquisition,” says Systemax CEO Richard Leeds.

Systemax isn’t saying much publicly about the enhanced Tiger Direct business going forward, including if it will continue to operate or rename about 43 CompUSA stores. The decision to wind down the CompUSA and CircuitCity.com brands came after Systemax completed an internal review of its U.S. consumer strategy, Leeds says. “The company's future North American consumer business would be optimized by consolidating its United States consumer operations under Tiger Direct, its leading and largest brand,” Leeds says.

In an e-mail to its e-commerce customer base, Systemax wrote: “CompUSA is changing! By Dec. 31, we will be consolidating with TigerDirect.com, a top e-commerce brand with 41 local stores for the tech expert.” In the e-mail, Systemax told shoppers they could sign up for daily deal alerts on TigerDirect.com and receive free shipping on thousands of products. The e-mail didn’t list specifics of the free shipping offer.

On both the CompUSA.com and CircuitCity.com home pages, Systemax has posted notices of the upcoming brand consolidation.

In their heyday, CompUSA and Circuit City were large national computer and consumer electronics retail chains. Systemax paid about $30 million to acquire the CompUSA business, including CompUSA.com in January 2008 after the company earlier filed for bankruptcy. Systemax acquired the assets of CircuitCity.com in May 2009 for about $15 million in another bankruptcy auction.

The move to consolidate the CompUSA and CircuitCity.com brands are part of broader plans by Systemax to streamline its operations, the company says.

For the first three quarters ended Sept. 30, Systemax reported:

  • A decrease in total sales of 3.7% to $2.60 billion from $2.70 billion for the first three quarters of 2011.
  • A decrease in consumer sales of 14.6% to $1.05 billion from $1.23 billion for the first three quarters of 2011.
  • A decrease in net income of 52.8% to $18.8 million from $39.8 million in the prior year.
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