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VIDEOFine Young Corporate Cannibals
Systemax feeds on defunct brands - and brings them back to life.
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But in December, Systemax (SYX) announced the coming of CompUSA's Retail 2.0, including 30 new retail outlets and 2 new sales offices nationwide. It’s not exactly the attack of the zombie brands, but this startling resurrection may be the first of many.
Retail 2.0 is an innovative concept that began with a maiden store in Miami, where retailers could do online research in the store itself, thereby making sure their purchase was an educated one. Under this model, the company also offers buying-workshop podcasts.
So how did this happen? Systemax, the Fortune 1000 company that established itself with their popular TigerDirect retail site, was the key. In January 2008, the company announced the acquisition of selected CompUSA assets in a “stalking horse agreement,” in which a buyer chosen by a bankrupt company purchases its assets.
In the deal, Systemax acquired CompUSA’s brand, trademark, e-commerce entity, and 16 retail outlets with the intent of establishing Retail 2.0. It planned to follow the TigerDirect model: a strong central online source, complemented by select retail outlets.
Last week, Systemax announced a similar stalking-horse agreement with Circuit City, acquiring the bankrupt company’s brand for $6.5 million as well as a share in any revenue generated over the next 30 months.
Hilco Consumer Capital, the company best known for signing a licensing agreement with Bob Marley’s estate, has done the same with bankrupt brands including The Sharper Image and Linens 'N Things. Recently, big brands like Polaroid, VeraSun Energy, and the Tropicana Casino and Resort have also been looking at stalking horse bids.
So what’s in a name? Apparently, nearly everything.
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