Systemax to Run Multibrand Strategy

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Systemax intends to run both its TigerDirect brand and its newly acquired CompUSA brands simultaneously online, but will rebrand its own retail outlets at CompUSA stores, according to executives at the firm.

Systemax recently acquired the brand, e-commerce site and 16 retail outlets of CompUSA, after the retail giant announced in December 2007 that it was closing all of its remaining 103 stores. CompUSA had continued to struggle after closing 126 stores in February 2007.

Click here to read more about CompUSA’s troubled year.

Gilbert Fiorentino, CEO of TigerDirect, said the firm will put the CompUSA Web site on top of its own site engine, but will continue to run both brands. “On the retail side we will rebrand our seven TigerDirect stores to CompUSA, but it’s more acceptable to run a multibrand strategy online, so we will keep the CompUSA URL and branding,” he told The Channel Insider.

However, although Systemax has acquired 16 retail outlets from CompUSA, Fiorentino said it would be unlikely that they would keep all of CompUSA’s employees. “We hope to keep the employees at the stores, but we have our own sales and marketing people. We have only acquired 16 stores; we have not acquired the massive overhead with this. We’re getting the good assets and not the overhead,” he said. He declined to discuss exactly how many employees would be affected.

Beth Vanni, director of consulting practice at channel analyst firm Amazon Consulting, said it was a interesting move by Systemax. “Many retailers have expanded and contracted their number of outlets. CompUSA has a good brand, although it is hard to know if any damage was done by closing its stores,” she said.

Vanni said CompUSA struggled because it did not do enough to differentiate itself. “Being in retail is challenging and expensive, and requires massive scale unless there is a key differentiator. It is a tough place to be, especially when you are competing with the likes of Wal-Mart these days.”

She said the product mix and services offered by Systemax would be a crucial element in its success.