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Tough Times for CE Retailers

February 8, 2011 | Author: sysadmindgs

Some chains are expanding, some are standing still, some are pulling back, and some are just plain going away.

In the last category, the final shoe has dropped and Ultimate Electronics has asked the bankruptcy court for permission to throw in the towel. The company has not been able to secure credit for new inventory, and plans to sell off the remaining product to raise cash and pay off its creditors. Expect it to be all over by April.

And then there’s 6th Avenue Electronics, which is a well-established regional retailer in the greater New York City area. They launched an aggressive expansion campaign two years ago, pushing outward into the Philadelphia market (including a store in Montgomeryville, PA that is just a short drive from here). Now the company is closing the three stores in the Philadelphia area and is phasing out two more in New Jersey. The problem is that these are taking too long to become profitable, and presumably they’d rather use their cash (or credit) for something else.

It’s been a tough couple of years in general, and for the consumer electronics market in particular. While signs of economic recovery are strong, I suspect that the competition for consumers’ dollars for electronics will remain stiff for the next few years. So don’t be surprised to see more changes in the retail market.