RIP Fry's Electronics

[gadgetfixup]

Fry’s Electronics expected to shut entire retail chain

Fry's Electronics is expected to close its entire chain of electronics superstores nationwide at midnight tonight.

venturebeat.com

 

[Sky-Knight]

Excellent, now I won't have clients that send me there for parts anymore.

 

[gadgetfixup]

Excellent, now I won't have clients that send me there for parts anymore.

My only concern is lack of competition and how it will probably affect the market.

 

[Porthos]

I used to go by the one in Austin, Texas when I used to take weekend drives for lunch at Boston Market.
I wished at the time that there was one here. Had a decent selection and prices as well.

 

[14049752]

My guess, Microcenter will buy up as much of their stock as they can and sell it cheap like they did for Radio Shack years ago. I can't wait!

 

[britechguy]

My only concern is lack of competition and how it will probably affect the market.

Probably very little. The amount of online competition in this market is pretty fierce already (which is probably one among many reasons for the demise of Fry's).

 

[Sky-Knight]

Yeah, Fry's didn't fall due to COVID, it fell due to Amazon and New Egg.

 

[phaZed]

Not to mention Fry's was an exercise in how not to manage a business. Huge stores with bizarre themes and almost no employees... stock was always an issue and if you lived somewhere where they don't have a store, they don't ship! WTF.

 

[Sky-Knight]

Not to mention Fry's was an exercise in how not to manage a business. Huge stores with bizarre themes and almost no employees... stock was always an issue and if you lived somewhere where they don't have a store, they don't ship! WTF.

Yeah they didn't adapt to modern retail requirements at all. Their supply chain was whacked too, I had more bad parts come from them over the years... especially HDDs. I'm NOT sad to see them go.

 

[britechguy]

. . . and if you lived somewhere where they don't have a store, they don't ship! WTF.

This was, long ago and far away, a not uncommon thing. Local stores were local and regional stores were regional. Virtually no one was national, and shipping from retail was not common.

What I cannot believe, in this day and age, is that there exists a restaurant chain (or even a mom and pop single location) that does not issue gift certificates or gift cards (the latter being a "bigger enterprise" thing).

My partner wanted to give his daughter $100 in pizzas from Russo's New York Pizzeria, which is a regional chain with a location very near their home in Austin, TX. Not only no option on the website, but even the location closest to them said they do not issue gift certificates. That's really leaving money on the table, and in an industry that can least afford it, now more than ever.

 

[gadgetfixup]

Probably very little. The amount of online competition in this market is pretty fierce already (which is probably one among many reasons for the demise of Fry's).

You might have a point there, wholesale in our industry has vanished. Most "wholesalers" have jumped in bed with Amazon to compete against shops rather than protect them. They'll sell a hard drive to you for $49 plus shipping while selling the same item directly to your customer for $44 with free shipping.

 

[Sky-Knight]

@britechguy Why? Prepaid VISA cards exist, expecting all businesses to play bank is silly.

The local Asian place my wife and I love does certificates, and they were SWEATING BULLETS when my parents bought $200 worth to gift my family because of the way it torques with their incomes. They only relaxed once they realized who they were going to. As a single place of business things aren't too bad, but when you start going regional you're talking about paying one place, and getting product from another.

As it was, the Asian place up the road was worried about getting $200 in December, and having us spend that $200 up to a year later. Mismatching your debts to your credits isn't fun. And unnecessary when there's prepaid VISA sitting there handling all that for you.

And Heaven help you when the tax man gets involved because income was in a different fiscal year relative to the expenses...

I very much understand why places don't want to do gift cards, I looked into doing them myself as part of a promotion... once my accountant got done with me that idea was clear out the window! I'm not a bank! My SMB restaurant friends aren't either!

 

[Sky-Knight]

The accounting can be a bit tricky and of course gift cards, once sold, represent a liability until they're redeemed, but... did you ever stop to think about how many gift cards expire unused? Free money!

That sounds like yet another way to get a bad review, watched that happen too.

I'm not a bank... customers have Visa for a reason!

 

[britechguy]

expecting all businesses to play bank is silly.

Were I doing so, you'd be right. But restaurants have a long, long history of issuing gift certificates or cards. These days you can buy those even at major retailers like Target, Walmart, etc., for many restaurant chains. I never even vaguely implied "all businesses," or even "most businesses."

I don't expect computer techs to be issuing gift certificates on a routine basis, though I'm sure some do.

 

[Sky-Knight]

Were I doing so, you'd be right. But restaurants have a long, long history of issuing gift certificates or cards. These days you can buy those even at major retailers like Target, Walmart, etc., for many restaurant chains. I never even vaguely implied "all businesses," or even "most businesses."

I don't expect computer techs to be issuing gift certificates on a routine basis, though I'm sure some do.

Yes, restaurant CHAINS.

Mom and pop shops can't do this easily at all, that was my only point. The one that I know near here almost went under thanks to them. Of course it was all their fault, for not taking that money and stuffing into a savings account, only drawing it when the expenses for that certificate showed up. But I have a sneaking feeling they weren't even really tracking the things all that well either. That opens a whole new can of worms.

Chains have an easier time of it, because there's a corporate office somewhere with the people and talent to track the money games.

 

[VISA MC]

Yes, restaurant CHAINS.

Mom and pop shops can't do this easily at all, that was my only point. The one that I know near here almost went under thanks to them. Of course it was all their fault, for not taking that money and stuffing into a savings account, only drawing it when the expenses for that certificate showed up. But I have a sneaking feeling they weren't even really tracking the things all that well either. That opens a whole new can of worms.

Chains have an easier time of it, because there's a corporate office somewhere with the people and talent to track the money games.

This is incorrect. There are many easy ways to track gift cards. In the merchant services side of my business, we offer a few different ways to track gift card balances, either that tie into a POS system or that just run on a standalone credit card terminal and some of them being free with the exception of purchasing the physical plastic cards.

You would need to check with an accountant to confirm for yourself, but typically gift cards are NOT treated as income until they are redeemed. So if a customer buys $100 in January it sits as a liability on your books until they use it. When they use it, the liability is reduced and the sale is recorded. There may be a difference in cash accounting vs accrual based accounting in terms of how expenses are recorded.

I can't imagine that a restaurant would go bankrupt if you bought $200 in January and redeemed it in July. They already got the cash, they spent it on other things, but that's relatively small for a restaurant.

Gift card laws changed in recent years that focus on how you can treat gift cards as far as can they expire, can you reduce the balance after 12 months etc. But for businesses it's amazing how many purchase cards that never get redeemed. It's usually in the 20-40% range.

 

[Mercenary Roadie]

Gift cards and other prepaid cards never expire in California and the issuer is required by law to turn the funds over to the state if they go out of business or a set number of years. The state puts the funds into a special account that the customer can make a claim against to get the funds back. The issuers also can't charge maintenance fees and such.