The CE Retail Carnage Continues

Here’s another name to add to the list: Theater Xtreme. The Delaware corporation ceased operations at the two company-owned stores in early December, as well as laying off all corporate employees, but took the next step of filing for Chapter 7 bankruptcy last week. It is possible that the company could regroup, but it is more likely that the remaining assets will be liquidated. One important point is that the company also is a franchise operation; 11 stores around the country are privately owned under the Theater Xtreme name. These stores are not affected by the bankruptcy filing, and will continue as individually owned and operated businesses.

Theater Xtreme specializes in “affordable” home theater installations. Until recently, a home theater often cost $100,000 or more, and was definitely the domain of the upscale consumer. New high definition front projectors have lowered the price from more than $20,ooo for a projector to under $5,000, and stiff competition has helped bring other costs down as well. Still, the market for dedicated theater rooms in homes remains fairly limited. Given the credit crunch and plummetting housing market, even well-heeled homeowners are settling for a large flat screen TV (or a small one, for that matter). They’re happy to save a few dollars by making their purchase at a big box store or shopping club, which cuts deeply into the specialty store business. And Theater Xtreme was not able to get the credit it needed to weather the slowdown.

This is just another example of the hard times for specialty consumer electronics retailers and installers, and you can expect to see other similar stores go out of business in the coming year.