Micro Center opening 3 new stores in 2023

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Micro Center opening 3 new stores in 2023

Post by Brian Lutz »

https://www.pcmag.com/news/electronics- ... nDo5V06Hag

For the first time since 2014 Micro Center is expanding, opening 3 new stores in 2023. The article above reports that one of these stores will be located in Indianapolis, and it has been reported that another store will be opening in Charlotte (Reddit thread citing a Charlotte Business Journal article.) So far there is no word on where the third store will be located. With these 3 stores the chain will have a total of 28 stores.

Micro Center seems to have an almost mythical status among technology enthusiasts (especially after the demise of Fry's and many smaller independent computer stores), so this is big news in the locations where the stores are confirmed to be opening.
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Re: Micro Center opening 3 new stores in 2023

Post by bryceleinan »

Indy is pretty close to the old Fishers, IN Fry’s… if they do open the one in Charlotte, I’d imagine the last one will be in another Fry’s territory - probably NorCal or PNW.
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Re: Micro Center opening 3 new stores in 2023

Post by Brian Lutz »

If they were going to open one in the Pacific Northwest I'm thinking Tacoma or Olympia would be a good place to do it because unlike Fry's (which was generally regarded as sketchy at best even before they started going downhill) I think Micro Center has enough of a reputation that people would go out of their way to visit the stores, and the store would want to draw customers from both the Seattle and the Portland areas. Centralia might be an option too, but seeing the countless tales on the PNW board about how impossible it is to actually open anything in Centralia suggests it's unlikely to happen, and it's probably further than people from Seattle might be willing to travel unless they were passing through on the way to Portland.

From what I've heard the former Fry's in Renton is likely to be torn down and turned into apartments. Micro Center stores are significantly smaller than Fry's stores anyway (the store that is reported to be the future Charlotte location is around 44,000 square feet.)
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Re: Micro Center opening 3 new stores in 2023

Post by storewanderer »

I think Tacoma is the right spot to open if they don't go into Seattle itself.

Tacoma is still central enough.

Olympia is a bit too far.

Frys has a number of real estate deals going on its former stores. Last I saw nothing happened on Sacramento, there were big redevelopment plans there. Roseville has already flipped and reoccupied, it was a much smaller site.
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Re: Micro Center opening 3 new stores in 2023

Post by ClownLoach »

The smallest Frys was still larger than any Micro Center. The problem that many electronics chains that didn't carry appliances experienced is that not only did prices decline 75% or more on categories like TVs and computers (meaning you had to quadruple traffic to break even) but the sizes of the units shrank. Thus many gigantic buildings like Fry's and older Best Buy units found themselves far too large to break even. There are several cases in SoCal where Best Buy closed their large format store to move into a much smaller closed Circuit City.

Micro Center does have a beautifully remodeled store in Tustin CA which is the prototype for their future expansion and remodels. On their website they do have a video walk through of a virtual model of the new upcoming store which appears to be about 90% the same. It's a great looking store format and they should be able to do very well.
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Re: Micro Center opening 3 new stores in 2023

Post by Romr123 »

Agreed on that store in Tustin. It's really a nice store and will be a good template for them to roll out. The old design they use has multiple rooms/alcoves and is just a little tough to shop in...the new is much more pleasant.
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Re: Micro Center opening 3 new stores in 2023

Post by BillyGr »

ClownLoach wrote: March 13th, 2023, 4:02 pm The problem that many electronics chains that didn't carry appliances experienced is that not only did prices decline 75% or more on categories like TVs and computers (meaning you had to quadruple traffic to break even) but the sizes of the units shrank.
Seems like it would depend on what they are actually making on each item, more than the actual price? In other words, if you make $100 profit on a computer sold, that may (or may not) change if the price of the item drops.
So, your "sales" total would drop, but if you are still able to make $100 per item, your profit doesn't.

The size thing makes sense, since that leaves empty unneeded space to pay for. Seems some stores solved that by dividing off a part of the building and leasing it out to someone else, if they were unable to move like you mentioned.
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Re: Micro Center opening 3 new stores in 2023

Post by ClownLoach »

BillyGr wrote: March 14th, 2023, 10:46 am
ClownLoach wrote: March 13th, 2023, 4:02 pm The problem that many electronics chains that didn't carry appliances experienced is that not only did prices decline 75% or more on categories like TVs and computers (meaning you had to quadruple traffic to break even) but the sizes of the units shrank.
Seems like it would depend on what they are actually making on each item, more than the actual price? In other words, if you make $100 profit on a computer sold, that may (or may not) change if the price of the item drops.
So, your "sales" total would drop, but if you are still able to make $100 per item, your profit doesn't.

The size thing makes sense, since that leaves empty unneeded space to pay for. Seems some stores solved that by dividing off a part of the building and leasing it out to someone else, if they were unable to move like you mentioned.
It's somewhat more complicated with electronics. I spent a decade in the business. Stores basically don't make very much profit on the item itself and never have. Many items like computers and printers were even sold at a -2% to -5% margin, below cost. All the profit is in the accessories, warranties, and installation services. Generally the prices of cables etc. also plummeted, accessories like TV stands and furniture became cheap wall mounts etc. and warranties are usually a percentage of the product price. Instead of needing big component cables you only need one HDMI cable. Wired connections are mostly now wireless. I could go on. So yes if prices fall 75% you need to make all that up, possibly more. This is why 75% of the electronics storefronts are also gone (Circuit City, CompUSA, Fry's, and many more). They weren't just taken out by Amazon either.
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Re: Micro Center opening 3 new stores in 2023

Post by BillyGr »

ClownLoach wrote: March 14th, 2023, 3:56 pm
BillyGr wrote: March 14th, 2023, 10:46 am
ClownLoach wrote: March 13th, 2023, 4:02 pm The problem that many electronics chains that didn't carry appliances experienced is that not only did prices decline 75% or more on categories like TVs and computers (meaning you had to quadruple traffic to break even) but the sizes of the units shrank.
Seems like it would depend on what they are actually making on each item, more than the actual price? In other words, if you make $100 profit on a computer sold, that may (or may not) change if the price of the item drops.
So, your "sales" total would drop, but if you are still able to make $100 per item, your profit doesn't.

The size thing makes sense, since that leaves empty unneeded space to pay for. Seems some stores solved that by dividing off a part of the building and leasing it out to someone else, if they were unable to move like you mentioned.
It's somewhat more complicated with electronics. I spent a decade in the business. Stores basically don't make very much profit on the item itself and never have. Many items like computers and printers were even sold at a -2% to -5% margin, below cost. All the profit is in the accessories, warranties, and installation services. Generally, the prices of cables etc. also plummeted, accessories like TV stands and furniture became cheap wall mounts etc. and warranties are usually a percentage of the product price. Instead of needing big component cables you only need one HDMI cable. Wired connections are mostly now wireless. I could go on. So yes, if prices fall 75% you need to make all that up, possibly more. This is why 75% of the electronics storefronts are also gone (Circuit City, CompUSA, Fry's, and many more). They weren't just taken out by Amazon either.
You missed part of my point. The prices went down on all those things that make profit, but that doesn't mean the PROFIT on them has to go down. Selling something that cost $50 or $10 can make the same amount of profit, depending on what you paid for the item to begin with. Seems highly likely that the cost of the items went down as the selling prices did (and even a warranty, as a % of selling price, since if the item now sells for far less, the costs will be far less if said warranty is actually used, thus profit may be changed little if at all).

Plus, when items drop 75% in price, more of them will be sold automatically, since people can far more easily afford to buy them at the much lower price. Like a computer, few people had them when they were $5,000 or whatever, as prices dropped (like Tandy and the $599.99), far more were sold, thus total sales didn't drop nearly as much :)
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Re: Micro Center opening 3 new stores in 2023

Post by ClownLoach »

BillyGr wrote: March 15th, 2023, 2:06 pm
ClownLoach wrote: March 14th, 2023, 3:56 pm
BillyGr wrote: March 14th, 2023, 10:46 am

Seems like it would depend on what they are actually making on each item, more than the actual price? In other words, if you make $100 profit on a computer sold, that may (or may not) change if the price of the item drops.
So, your "sales" total would drop, but if you are still able to make $100 per item, your profit doesn't.

The size thing makes sense, since that leaves empty unneeded space to pay for. Seems some stores solved that by dividing off a part of the building and leasing it out to someone else, if they were unable to move like you mentioned.
It's somewhat more complicated with electronics. I spent a decade in the business. Stores basically don't make very much profit on the item itself and never have. Many items like computers and printers were even sold at a -2% to -5% margin, below cost. All the profit is in the accessories, warranties, and installation services. Generally, the prices of cables etc. also plummeted, accessories like TV stands and furniture became cheap wall mounts etc. and warranties are usually a percentage of the product price. Instead of needing big component cables you only need one HDMI cable. Wired connections are mostly now wireless. I could go on. So yes, if prices fall 75% you need to make all that up, possibly more. This is why 75% of the electronics storefronts are also gone (Circuit City, CompUSA, Fry's, and many more). They weren't just taken out by Amazon either.
You missed part of my point. The prices went down on all those things that make profit, but that doesn't mean the PROFIT on them has to go down. Selling something that cost $50 or $10 can make the same amount of profit, depending on what you paid for the item to begin with. Seems highly likely that the cost of the items went down as the selling prices did (and even a warranty, as a % of selling price, since if the item now sells for far less, the costs will be far less if said warranty is actually used, thus profit may be changed little if at all).

Plus, when items drop 75% in price, more of them will be sold automatically, since people can far more easily afford to buy them at the much lower price. Like a computer, few people had them when they were $5,000 or whatever, as prices dropped (like Tandy and the $599.99), far more were sold, thus total sales didn't drop nearly as much :)
Here's another way to look at the situation: Circuit City brought in $12B a year at bankruptcy and Best Buy was at $55B a year. In the 12 months after Circuit City finished liquidation Best Buy staffed up, rushed new stores, and even took over many Circuit City Store locations to capture share. The sales for that 12 month period were... $53B. So a $12B a year retailer disappeared and their #1 competitor not only didn't gain a dollar of sales but actually lost revenue. Now they only bring in $46B a year.

The margin percentages have remained tight and the prices have declined 75%, but the longevity of the products has also greatly improved. There was a short term rush to adopt new technologies like LCD TVs and iPhones but ultimately that has slowed down as technology hasn't really advanced much in recent years. The point is that the electronics business was always very difficult to be in. You had to increase the transaction count to offset the declining average retail. And more transactions means more labor cost on lower revenue. It's just a miserable business and that's why you continue to see electronics retailers of all sizes and shapes disappear, and will continue to do so unless they've got a really good niche. Micro Center has a fantastic niche - they're the last standing "build your own computer" national chain, they don't have any debt, they pay for new stores and remodels with cash, and they're incredibly good at selling profitable warranties and such because they maintain a commissioned sales force (on a policy of you don't sell you don't get paid, you lie when you sell you lose extra commission on all returns).
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