As an apparently affordable means of staying relevant, direct marketing company PCM, Inc. has purchased TigerDirect in addition to a handful of business assets from TigerDirect’s parent company Systemax. The acquisition will officially close on December 1, 2015, costing PCM a total of $14 million. The deal is quite limited, and doesn’t give PCM the rights to any of Systemax’s cash, accounts receivable, inventory, or trade payables.
For those unfamiliar, TigerDirect is a consumer electronics retailer that, as its name suggests, sells products directly to the customer through its website and catalog. Toward the end of Circuit City’s lifespan, the former electronics storefront giant was absorbed into TigerDirect after being purchased by Systemax in 2009, interestingly enough for the same $14 million price tag.
Systemax had opened a sparse total of thirty-four brick-and-mortar TigerDirect retail stores scattered across the country. Only three are still open today, and the PCM acquisition requires that this retail remnant — comprised of the flagship location in Miami and stores in Georgia and Puerto Rico — be shut down as part of the deal.
The sale isn’t exactly surprising considering the recent legal problems of TigerDirect’s founders. The two brothers who pioneered TigerDirect were convicted of bribery (involving over $11 million) and other illegal practices that they concealed from shareholders. The older of the two, Carl Fiorentino, was sentenced to 80 months in prison, while younger brother Gilbert Fiorentino will spend only 60 months in the big house, and they were both required to pay back $3.06 million in restitution.
This news comes less than a month following PCM’s acquisition of Canadian IT solutions provider Acrodex for 16.5 million Canadian dollars, or about $12.4 million in American money. In a world where companies like Amazon offer the same products with faster and cheaper shipping options, it’s no wonder PCM needs to find new ways to keep its business fresh. So, when all the other retailers run out of stock of the latest amiibo, you can be certain we’ll all flock to TigerDirect to buy it for a few dollars more than the going rate.
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