Circuit City and Systemax are talking
Think Circuit City is dead? Well not so fast. The company is in talks with Systemax (yes that Systemax – the same company that gobbled up CompUSA after it went belly up.. but more on that in a sec) and has entered into a “stalking horse agreement” with the company to purchase some of Circuit City’s assets including the brand name and the online website. If the agreement goes through, Systemax would provide a portion of the website revenues to Circuit City for two and a half years.
This deal follows up Systemax’s purchase of CompUSA assets early last year. By all accounts, that purchase seems to have gone through quite nicely for Systemax as the company has transformed the former computer retailer giant into a swift and nimble online e-tailer. The keys to the success thus far? A combination of the name brand and low prices which has made the company competitive again in light of online companies such as Newegg, Buy.com, and Amazon.com.
Similar to the CompUSA deal, buying Circuit City would add more distribution for Systemax (which also designs and manufactures its own products) which basically means more sales opportunities for the company and its products. Will it see the same success that it saw with CompUSA? It depends on how it markets Circuit City and what products it ultimately sells under that brand. Good service and good pricing never hurt a company right? (well it may hurt the bottom line sometimes). In any case, it’ll be interesting to see what happens on this front over time. Who knows – maybe Systemax will be a household name in a few years
The real question is – will we see Circuit City stores again (like we’re slowly seeing CompUSA stores again)?
Read this in Chinese Simplified and in French
