Systemax, the parent company of Miami-based TigerDirect, said Wednesday it plans to exit its brick-and-mortar electronics business. The company will focus exclusively on selling online and directly to businesses.
The move will include closing a distribution center and 31 of its 34 stores and the company will lay off an unspecified number of workers. The announcement accompanied the company's fourth-quarter earnings.
“We've made the decision to primarily serve the consumer markets around [the] e-commerce platform and exit substantially all of our brick-and-mortar consumer retail stores,” Systemax chairman and chief executive Richard Leeds said during a call with analysts.
Systemax reported $912.9 million in sales during the three months that ended in December, up 4.4 percent from the same period a year ago. But retail sales of computers and other electronics, which account for roughly a quarter of the company's overall revenue, fell 1.6 percent, to $260.4 million. Sales directly to businesses rose 7 percent, to $652.5 million. Rising expenses and a $10 million asset impairment charge led Systemax to report a $25.5 million loss for the quarter. The company employs about 5,100 people globally.
The decision comes a week after two brothers who once ran Systemax's retail operation in Miami were sentenced on bribery changes. Carl Fiorentino, who admitted to taking $9.5 million in kickbacks in exchange for buying from certain vendors, was sentenced to 6½ years. Gilbert Fiorentino, who took $600,000, got 5 years.
Miami Herald wire services