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ComputerWare/Elite Chain Throws In The Towel
An anonymous reader writes "ComputerWare, a ComputerLand-like chain of stores specializing in Apple computers, went out of business in 2001. Thinking he sees an opportunity for expansion, the guy who owns Elite Computers, the long-time independent Apple computer store literally across the street from Apple HQ in Cupertino, bought the CW name and leased and reopened the SF Bay Area stores as 'ComputerWare by Elite Computers.' In 2003, Mr. Elite realized the reason the original ComputerWare owners got out -- Apple's engaging in 'unfair competition' -- and announced he is closing the chain along with his original store."
I was so thrilled to be there, though I had just missed the 5pm closing time of the gift shop, so I could only drive around in an infinate loop ;-).
Anyway, I remember seeing this Apple dealer across the street (well, go out the front of the complex, make two rights, and make a sharp left across the street). They had a large colored Apple logo (the old "rainbow" style, which I am sentimental for), even though every other Apple symbol around was the new metal/steel/aqua or whatever they call it. I found that strangely comforting that even though Apple changed their logo, their old one was always staring them right back into the doorway of the gift shop. I was glad they didn't change their sign.
Anyway, silly nostalgia and memories.. go back to your own business..
Never hit your grandmother with a shovel, for it leaves a bad impression on her mind...
Sadly enough, it doesn't really surprise me. I lived down the street from the Capitola store and was always annoyed that they didn't have a website. A simple thing like that could have helped draw customers to that location instead of having to drive over to the Apple Store over the Hill. It WAS fun having new Apple stuff within walking distance. They just didn't have decent business sense.
"He uses statistics as a drunken man uses lampposts...for support rather than illumination." - Andrew Lang
My problem with their complaint is they're only putting forward one possible explanation for their failure. The Apple Stores are a stunning example of what to do right in a store. Computerware in the last few years have been run by a dodgy unhelpful group of people not interested in customer service, or bringing people into their store. That makes all the difference, even before issues like stock availability. I doubt it would matter how Apple handled them, they would have went out of business just as quickly the way they were being run.
Truth be known, if I were Apple I'd want stores like ComputerWare to be as far away from my name as possible, they certainly don't do it a service.
I can't comment on the contract issues between Apple and Elite since I have no knowledge of them but I think there are many other factors at work in this situation that would lead to the closing of the Elite stores.
First, Computerware went out of business once before. They had a reputation of having helpful, well informed, sales people but very high prices in an extemely competitive market. Typically, they would sell ALL of their products at MSRP, this includes video cards, USB hubs, software, etc. You gotta keep in mind that they were a retailer that had several Fry's Electronics, CompUSA, and a MicroCenter, all less than ten minutes away in any direction from many of their stores (except Capitola). Each of these companies sells Apple computers and has a huge selection of peripherals and software, many work around the Apple MSRP by offering specials on other products when you buy an Apple computer. Computerware did not and subsequently went out of business.
Elite then bought out Computerware and implemented EXACTLY the same business model. Add to that the extremely high rent for commercial property in silicon valley over the last few years and you have a recipe for miniscule profit margins. To their credit, Elite re-hired many of the old Computerware staff but the high prices made it a place to buy only as a last resort. I remember going in there to buy a Radeon 9000 video card. They insisted on selling it at full retail so I went and bought it at Microcenter on sale and saved over $40. On another occassion, I went to buy a second battery for my G4 laptop and they had it sticker priced at $149 and marked down to $139 when I can buy it anywhere else (not just Apple) for $129 and this was after they had already announced that they were going out of business.
I am still unhappy to see them go since I think that fewer Apple retailers, even if they are high priced, is a bad thing but I don't think that the owner can blame Apple for all of these factors. He took a gamble on a failed chain, implemented the same sales plan, and expected a different result.
I happen to live within just a block of one of the ComputerWare stores and have watched it go out of business twice. The store did fair business. In visiting, there had been no time in the past several years that I was the only one in the store, and it was often crowded. If they didn't make money, it's because it was run poorly. They were always busy. Another local Mac shop had/has the same amount of foot traffic and remains open.
But let me also tell you a story of another place where I've lived, the Pacific Northwest. My family purchased three Apples (IIc, Mac SE, IIgs) over time from a chain called "The Computer Store." which has been in business there since the early eighties, and now is called "The Mac Store." They did a great job of presenting Mac in a clean and professional retail environment with knowledgeable salespeople. They probably still do.
The point is, that in opening retail stores, Apple initially opened bay area stores in Santa Clara and Palo Alto. That was the original plan, and it was fair. They put one near Apple's campus in Cupertino and another in a well-travelled shopping district in an affluent town.
But - they didn't put any stores in Oregon or Washington. Why? The Mac Store chain is doing very well selling Apple products, with satisfied customers. There was no great need for Apple to go into those areas. Apple just recently opened a Seattle-area store, and will likely go into Portland at some point. But they are being very careful not to but The Mac Store in trouble. They couldn't be more respectful of The Mac Stores' ability to stay in business.
In the Bay Area, ComputerWare was the only Apple chain, and when they went out of business (the first time), Apple suddenly a store into Emeryville (near Pixar HQ) and announced Burlingame and Walnut Creek stores. It was a solid, sensible move to retain customers. All the sudden here comes Elite, which had never given Apple much trouble before, and they spend tons of cash to rebuild the ComputerWare chain, putting stores into the same markets.
I never understood it - why would you invest so much money in competing with Apple in retail? Well it was pretty obvious that Apple was going to win that war, just on brand recognition. How could Elite ever earn the investment back selling low-margin Macs? They knew very well what they were getting into. Forget "unfair practices" - the ComputerWare stores were doomed, and Elite should have known it. It was a stupid move. Whatever they're claiming now is just legal cover for investors and future lawsuits.