Quoted – Retailer Smart Buys at Stupid Prices will shut all 22 locations – Fresno Bee
Experts say the closure is proof that it takes more than low prices to make it in this economy. The Washington-based chain, which sells surplus and close-out merchandise from other retailers, has stores in California and Washington.
Employees at the Merced store — which opened in July — and the Stockton store confirmed that their locations will close as well.
Closing stores so soon after opening them is unusual, said Scott Testa, a professor who follows retail at Cabrini College in Philadelphia. He noted that he doesn’t have first-hand knowledge of what happened with Smart Buys.
“Opening stores in the summer and closing down completely in September tells me that … maybe they grew a little too quick, or maybe they lost some financing,” he said. “Those indications tell me that something horribly went wrong.”
When retailers run into financial troubles, they typically stop opening new stores and focus on becoming financially sound, sometimes closing underperforming stores, he said.
Midsized retailers have a tough time competing against larger chains, and Smart Buys may have faced some of the same challenges that the now-closed Gottschalks faced, Testa said. Such stores have less pull with manufacturers than large chains, he said.
“The smaller chains sometimes get stuck with the crumbs,” he said. “If there’s a hot product that a lot of people want, the Best Buys and the Wal-Marts of the world, they usually get first dibs.”
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