Tweeter pulls the plug on its online store
Electronics retailer Tweeter Opco LLC has closed its online store, according to a message posted on Tweeter.com. “The online store is currently closed,” the message says. Tweeter filed for Chapter 11 bankruptcy in June and was purchased by hedge fund asset management company Schultze Asset Management LLC in July for $38 million in cash and assumption of liabilities, including $8 million in additional costs and a credit line of $10 million.
Tweeter’s move, and CompUSA’s announcement last week that it would close its stores, could be the result of competitive heat in the lower-margin consumer electronics marketplace. Maris Daugherty, a senior consultant for J.C. Williams Group, says category leaders, in particular Best Buy Co., have made it hard for other niche retailers to compete.
“Best Buy’s footprint and size along with their customer-centric approach has made it difficult to compete in the specialty electronics category,” says Daugherty. “Best Buy has raised the bar in terms of selection, service and convenience at competitive prices. They’re early pioneers of many multi-channel practices such as buy online, pick up in store. They’ve encouraged researching online first with the multi-channel tools that they have.”
Best Buy Co. is No. 11 in the Internet Retailer Top 500 Guide.
CompUSA closed its stores subsequent to the company’s sale to Boston investment bank Gordon Brothers Group LLC, which plans to continue operating CompUSA.com until a buyer for the e-commerce site can be determined.
Since the Tweeter acquisition, Schultze closed about a third of Tweeter stores and laid off half of Tweeter’s headquarters staff in efforts to trim overhead. New CEO George Granoff replaced former CEO Joe McGuire. At the time of his appointment, Granoff said his goal was to make Tweeter a “more nimble, more entrepreneurial organization.” The company still operates 103 stores, reduced from 153 this summer. A message on the web site states that online gift certificates can be converted into store gift cards and used at Tweeter stores. Tweeter is No. 242 in the Internet Retailer Top 500 Guide.
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