- Fry's Electronics announced on Tuesday that it ceased operations and commenced a wind-down process, according to a message on the company's website.
- The consumer electronics retailer cited changes in the retail industry and "challenges posed by the Covid-19 pandemic" as reasons for its decision.
- Fry's is closing its 31 stores across nine states and has shut down online operations.
After nearly 36 years in business, Fry's Electronics is closing its operations permanently.
The company, which is based in San Jose, California, was founded in the mid-80's as a Silicon Valley electronics store with the goal of providing a one-stop-shopping environment for high-tech professionals.
The shut down "represents the end of an era and a sad day for its army of loyal shoppers," Neil Saunders, managing director of GlobalData, said in emailed comments.
COVID-19 has been pointed to as the catalyst for many bankruptcies that have occurred in the past year, as retailers experienced the impact of changing consumer spending habits, hesitation with indoor shopping and temporarily closed stores last spring.
However, increased competition from Best Buy and Amazon coupled with large physical stores may have put Fry's on a precarious path prior to the pandemic.
"[E]ven before the coronavirus hit, Fry's was struggling to make the economics of its business stack up. More and more customers were drifting off to rivals, including specialists like Best Buy and generalists like Target, as well as to online retailers," Saunders said.
While electronics as a category was not hit as hard as other parts of the industry, it has taken a dip in sales, most recently posting a 4% loss according to January's monthly retail sales numbers from the U.S. Commerce Department. In December, electronics were down 15.7% year over year.
Although competitor Best Buy reported a blockbuster Q3 with sales up 21% year over year and a digital sales increase of nearly 174%, it too is making operational shifts in response to a new consumer reality. The retailer has reportedly cut jobs and hours for some of its store workers as it leans more into a digital strategy.
Fry's Electronics stated the retailer "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."