TigerDirect throws the towel, closes all retail

[spuwho]

TigerDirect.com is shutting down all retail nationally. The 2 stores in Jacksonville will close as soon as the fixtures and shelves are sold.

Pinched on the front end by declining retail sales and attacks by states attorney generals on their rebate practices, their attempts to move to general merchandise and home automation failed miserably.

They will continue to offer sales through their eCommerce site and the flagship store in Miami next to the HQ will stay open.

Need a deal on a large TV, computer or accessory? Enjoy it while it lasts.  All sales are final.

[spuwho]

Per Yahoo Finance:

Brothers guilty of fraud at Systemax sent to federal prison

Brothers guilty of fraud at Systemax computer company sent to federal prison by Miami judge

MIAMI (AP) -- Two South Florida brothers who were once top executives with the Systemax Inc. computer supply company were sent to prison Tuesday after pleading guilty to federal charges for accepting millions of dollars in bribes and kickbacks from companies doing business with their former employer.

U.S. District Judge Jose E. Martinez handed Carl Fiorentino, 57, a prison term of over six years, while 55-year-old Gilbert Fiorentino got five years behind bars. Records show their scam cost Systemax at least $27 million in higher supply costs and that Carl Fiorentino alone received at least $9.5 million in kickbacks from a Taiwanese supplier, RICI International.

Assistant U.S. Attorney Jerrob Duffy said the brothers occasionally received bags of cash from vendors in company parking lots of a Systemax subsidiary, TigerDirect, including one filled with more than $240,000 in gold coins intended to help the scam escape detection. Duffy held that bag aloft in court as a symbol of the crimes.

"They weren't really in the business of helping Systemax," Martinez said. "They were in the business of helping the Fiorentino brothers."

Systemax, based in Port Washington, New York, has substantial operations in South Florida. Its brands include TigerDirect, Circuit City and CompUSA. The Fiorentino brothers founded the company in Coral Gables that became TigerDirect, and they later became executives at Systemax when it purchased TigerDirect in 1996.

Gilbert Fiorentino pleaded guilty to a conspiracy charge, while Carl Fiorentino pleaded guilty to both fraud conspiracy and tax evasion. Carl Fiorentino had faced significantly more time than Gilbert Fiorentino, but Martinez decided to sentence them to similar prison terms.

Eric Lerner, chief counsel at Systemax, said the crimes to which the brothers pleaded guilty likely represent only a portion of the fraud they committed between 2003 and 2011. He noted that the money was used on waterfront Coral Gables mansions, exotic cars, yachts, fine furniture and other toys of wealth. Gilbert Fiorentino did company business on his personal American Express card, accumulating some 300 million points.

"Essentially, they were treating TigerDirect as their own personal candy store," Lerner said.

Although the brothers were involved in multiple schemes, the biggest was with the company's Taiwanese supplier, RICI, and its top executive Eddy Kuo.

Over the years, RICI was paid more than $157 million by Systemax for various computer parts, cables and equipment. While RICI was paying the Fiorentino bribes and kickbacks for the business, Duffy said, it was also overcharging Systemax and TigerDirect by more than $27 million for the supplies.

"The companies paid more than they would have but for this corrupt relationship," the prosecutor said.

Kuo has also been charged in the case but has remained a fugitive in Taiwan. An April restitution hearing is scheduled to determine how much the brothers owe Systemax in restitution — likely in the tens of millions of dollars.

Both brothers were contrite and apologetic in brief statements Tuesday. Gilbert Fiorentino, who was higher-ranking of the pair at Systemax, said he had been proud of what he built.

"I think that pride turned into arrogance and greed," he said. "I know I broke the rules and I broke the law."

Carl Fiorentino said in the long run the scam wasn't worth it.

"I can only blame myself. A bigger house and everything else did not make me a happy person," he said.

[Jimmy]

That's too bad.  I used to enjoy strolling through CompUSA back in the day, then TigerDirect.  Of course, I also enjoyed Circuit City, Sound Advice and... McDuff, way way back in the day. 

Guess it's the way of the Walmart and Amazon world...

[coredumped]

I would love to get a Frys in town, so much better selection and really good pricing.

[spuwho]

I would love to get a Frys in town, so much better selection and really good pricing.

Frys in greater Jacksonville has no better odds than an Ikea.

Frys has also been hurt by the decline in consumer electronics sales.

The last time I was at either the Duluth GA (Atlanta) or the Downers Grove IL (Chicago) stores, both showed signs of cost cutting and the selections (which used to be incredible) were down significantly. The Frys outside Portland (OR) still was fairly decent but they had closed off alot of floor space.

This "decline" in consumer electronics is fascinating because since the end of WWII it was always a growth industry and somwhere after 2000 it stopped. The only growth is in smart phones now.

While the death of Radio Shack could be blamed on bumbling and overly conservative management decisions,  the death of TigerDirect is tied to the greedy former owners.  The store at SJTC was actually profitable even though the management in Miami was starving it in product.  Acting as a "mini-Frys" they filled a market niche, especially an underserved one in Jax.

It will be interesting to see who arises to take their place.

[I-10east]

In 2012 HHGregg was the fastest electronic big box retailer; Is that still the case?

[JFman00]

I would love to get a Frys in town, so much better selection and really good pricing.

Frys in greater Jacksonville has no better odds than an Ikea.

Frys has also been hurt by the decline in consumer electronics sales.

The last time I was at either the Duluth GA (Atlanta) or the Downers Grove IL (Chicago) stores, both showed signs of cost cutting and the selections (which used to be incredible) were down significantly. The Frys outside Portland (OR) still was fairly decent but they had closed off alot of floor space.

This "decline" in consumer electronics is fascinating because since the end of WWII it was always a growth industry and somwhere after 2000 it stopped. The only growth is in smart phones now.

While the death of Radio Shack could be blamed on bumbling and overly conservative management decisions,  the death of TigerDirect is tied to the greedy former owners.  The store at SJTC was actually profitable even though the management in Miami was starving it in product.  Acting as a "mini-Frys" they filled a market niche, especially an underserved one in Jax.

It will be interesting to see who arises to take their place.

Was at the Downers Grove Fry's last month, shocked at how barren the shelves seemed. I think physical retailers will be hard pressed to compete with the likes of Newegg and Amazon given not only the demographic served but also how easy it is to DIY the services retailers could differentiate themselves with.

[spuwho]

I would love to get a Frys in town, so much better selection and really good pricing.

Frys in greater Jacksonville has no better odds than an Ikea.

Frys has also been hurt by the decline in consumer electronics sales.

The last time I was at either the Duluth GA (Atlanta) or the Downers Grove IL (Chicago) stores, both showed signs of cost cutting and the selections (which used to be incredible) were down significantly. The Frys outside Portland (OR) still was fairly decent but they had closed off alot of floor space.

This "decline" in consumer electronics is fascinating because since the end of WWII it was always a growth industry and somwhere after 2000 it stopped. The only growth is in smart phones now.

While the death of Radio Shack could be blamed on bumbling and overly conservative management decisions,  the death of TigerDirect is tied to the greedy former owners.  The store at SJTC was actually profitable even though the management in Miami was starving it in product.  Acting as a "mini-Frys" they filled a market niche, especially an underserved one in Jax.

It will be interesting to see who arises to take their place.

Was at the Downers Grove Fry's last month, shocked at how barren the shelves seemed. I think physical retailers will be hard pressed to compete with the likes of Newegg and Amazon given not only the demographic served but also how easy it is to DIY the services retailers could differentiate themselves with.

There were several at the SJTC store that saw the B2B and SMB market as ripe in greater Jacksonville. They were just starting to dump the mobile displays and selling phones and moving into higher margin gear like POE switches and servers. They were recommending that TigerDirect cut the showroom by 2 thirds and model it as a prosumer/SMB marketplace with a professional sales team. It didnt happen, nor do I think it would. TigerDirects roots are in office supplies and rebranding of Taiwanese gear. Most of the sales staff there pre-close were not much different than any other retail. A move upmarket was just not in their gene pool.

The former owners thrived on the psychology of people wanting the "rebate" price and then either forgetting the rebate form, or only issue the check if someone complained.

[thekillingwax]

I'm going to miss them. I liked having a place to go and buy a higher-end videocard and other components. When I built my current system, I think the only components I had to order were the motherboard and CPU, TD had everything else I needed in stock. They also had the best deals on memory cards for phones. I know you can overnight everything from amazon/newegg but I'll miss it. They did sell too much crap though- bad prices on TVs, lots of weird junk like waffle irons and kitchen gizmos.

[JimInJax]

Fact of the matter is simple - TD Retail made all the same mistakes that CompUSA made. High prices (higher than Best Buy most of the time), poor service, and arcane business practices like a restocking fee on returns. Why would I want to deal with all that BS, when I can get it overnighted from Amazon, without the hassle?

EVOLVE or DIE - they didn't evolve.

[spuwho]

Fact of the matter is simple - TD Retail made all the same mistakes that CompUSA made. High prices (higher than Best Buy most of the time), poor service, and arcane business practices like a restocking fee on returns. Why would I want to deal with all that BS, when I can get it overnighted from Amazon, without the hassle?

EVOLVE or DIE - they didn't evolve.

BestBuy was only able to lower prices on some select items, most of it was exclusive for advertising purposes.  But generally BestBuy would exit certain catagories where they could not compete with TD. The price match was killing them.

I disagree on the aspect that TD repeated CompUSA mistakes.

CompUSA had a habit of only selling what turned the fastest in inventory. CompUSA was to USB cables what Radio Shack was to batteries. At one point in time CompUSA had a whole aisle dedicated to just USB cables.  It was a huge joke.

TD had some other glaring issues that were unique to them alone. One person in Miami was controlling products. This meant all stores were seeing the same things even if it didnt sell.

Problems with their OEM suppliers. Shelves stocked with products that relied on another product which wasnt available in retail or online.

Mismatched product selections. Selling 3 types of ITX cases but not one ITX board.

Employee graft. Not present in Florida, but I used to see stuff walk out the door with employees from time to time in other stores.

I agree that CompUSA had some weird return policies and if you did return something, you had to go through the "geek gauntlet" to prove you knew what you were doing.  At TD you had timeframes to prove it or be subject to fees. However my experince there was different. I never got 1 stocking fee ever even though the policy existed. Why? Who knows.

Unfortunately Amazon may offer a low price and quick delivery, but they bug the crap out of you pushing similar products after you order. They think they know what you want. In reality all they want is your shopping habits so they can mine it. They are getting a little out of control.