Regional CE Chains Seeking New Locations Have Better Leverage, Executives Say

Several regional CE chains plotting expansion have better bargaining leverage from the recent demise of Ultimate Electronics and from Borders’ bankruptcy, said industry executives we canvassed. The Ultimate Electronics move to liquidate 46 stores and the Borders decision last week to shut 200 stores will dump retail space into a market already bursting at the seams with empty former Circuit City, CompUSA and Tweeter locations.

Hhgregg’s plans to open as many as 20 locations in the Chicago area include filling former Circuit City stores, the executives said. Seattle-based Video Only recently bought a former Circuit City location in Spokane, Wash., to lay the groundwork to enter the market. And Micro Center, which pushed closer to New York City by opening a store in Yonkers, N.Y., last year, is scouting Manhattan for a high-profile location, the executives said.

Video Only’s real estate manager, Mark Darnell, declined to comment on expansion plans, indicating the chain may have more to say in six months. Hhgregg officials weren’t immediately available to comment. The chain plans to add 40-45 stores this year, including in a major push into South Florida.

For a possible entry into midtown Manhattan, Micro Center has looked at the Fifth Ave. location once occupied by CompUSA, executives said. The site has been vacant since CompUSA as a chain went under. Micro Center has been scouting Manhattan about eight months, the executives said. The Fifth Ave. location has a checkered history. Before CompUSA, the building housed Tops Appliance City, which also liquidated. Retailers Datavision and Rockwell Computer Systems also were in the neighborhood.

"Ten years ago that would have been a prime location to look at, but at this point the person shopping” the Lord & Taylor nearby isn’t going to go there, said Ahron Schachter, strategic planning director at New York retailer Adorama. “I get calls to see if we would be interested in moving in, and I wouldn’t. We do want to open a second location, but that is not where we want to be."

Adorama has a 30,000-square-foot store spread across several floors in New York, Schachter said. Plans aren’t final, but Adorama is seeking a 50,000-square-foot space where the store could operate on a single floor, Schachter said.