Fry's Electronics Shutting Down Operations; Victim Of COVID-19 Fiscal Woes
SAN JOSE (CBS SF) -- Long-time San Francisco Bay Area retail mainstay Fry's Electronics has announced it will be shutting down its 31 stores across nine states as a result of the fiscal impact of the COVID-19 pandemic.
For months, the company has struggled to keep its doors open in the wake of shutdowns forced by surges of the illness in California and across the nation.
On Wednesday, the San Jose-based chain shutdown its website, posting a good-by message to its customers.
"After nearly 36 years in business as the one-stop-shop and online resource for high-tech professionals across nine states and 31 stores, Fry's Electronics, Inc. has made the difficult decision to shut down its operations and close its business permanently as a result of changes in the retail industry and the challenges posed by the Covid-19 pandemic," the company said.
"The company will implement the shut down through an orderly wind down process that it believes will be in the best interests of the Company, its creditors, and other stakeholders.
The company ceased regular operations and began the wind-down process on February 24, 2021."
Fry's said it "hoped that undertaking the wind-down through this orderly process will reduce costs, avoid additional liabilities, minimize the impact on our customers, vendors, landlords and associates, and maximize the value of the Company's assets for its creditors and other stakeholders."
Within hours of the company's Wednesday announcement, a steady stream of longtime customers came to the San Jose flagship store on Brokaw Road to commiserate. They found the metal security gates had been pulled down, and the doors shut with a sign that read "Dear Fry's electronics customers - This location is permanently closed. We appreciate your business over the past 36 years."
Sundeep Borra was in "grief," thinking back on all the prototypes and school projects he had built using components from the store. Oftentimes Borra would wander the aisle looking for inspiration.
"This used to be the electronics guy's heaven," said Borra. "It's very sad to see Fry's going down like this."
Jason Binn came here to return a garden hose and reminisced about visiting the store as a toddler, with his dad who was an engineer.
"Disappointed. It's unfortunate but I think it was just one of those things that you kind of felt was inevitable," said Binn.
The company was founded in 1985 in Sunnyvale, and soon grew to be a retail powerhouse and Black Friday destination. Their TV commercials and print ads regularly flooded the airwaves and newspapers. Stories about Steve Jobs and Steve Wozniak shopping for parts at Fry's to build their earliest devices cemented the company's place in Silicon Valley history.
Then, the arrival of Amazon, eBay, Best Buy and other competitors steadily chipped away at Fry's dominance. The company began offering Internet price-matching and same-day delivery.
By 2019, empty shelves began raising questions about the company's future. Fry's denied rumors of its demise, insisting it was shifting to a "consignment model", where vendors get paid as their inventory is sold, but retain control of the product. By the end of 2020, all but four locations remained in the Bay Area. Finally, on Wednesday morning, the company pulled the plug completely.
"Fry's is a Bay Area institution whose time has passed," said Professor Kirthi Kalyanam, director of the Retail Management Institute at Santa Clara University, who said not much could have been done to save the business, whose model was to cater to electronics enthusiasts who sought large selections, without a desire for strong customer service.
"You can always imagine a day where they woke up 20 years ago and said 'We want to go online and we want to be the marketplace for electronics online.' Twenty years ago if they decided that they wanted to do that, maybe, but then that's the Amazon journey, right?" said Kalyanam. "I hope that people don't forget this part of time in Silicon Valley. We have a tendency to forget things that have moved on. This is very much an interesting part of the development of the computer industry. And I hope no one forgets that."
As for customers who have purchased products at Fry's -- "The company is in the process of reaching out to its customers with repairs and consignment vendors to help them understand what this will mean for them and the proposed next steps."
Dozens of retailers have closed stores and reduced operations since the pandemic broke out nearly a year ago including the Gap, Abercrombie & Fitch Co., American Eagle Outfitters, J.C. Penney and Neiman Marcus.