Circuit City goes Canadian
US electronics superstore retailer Circuit City has gotten government clearance to buy Canada's InterTAN a company that owns over 900 home electronics stores (some rather small) across that country. The deal is reportedly for $284 million US.
InterTAN runs its stores under the names Rogers Wireless, Batteries Plus, The Communications Store, and Radio Shack Canada. That last company is a brand that is a major rival to Circuit City in the US, and it will be interesting to see what happens. Already, Tandy, the parent of Radio Shack has sued in US court to terminate InterTAN's license for the name, due to a supposedly late licensee payment. In fact, InterTAN (from International Tandy) was spun off by Tandy to manage its non-US stores, but has since sold off UK and Australian operations. Tandy, which is the #3 home electronics chain in the US, after #2 Circuit City, is understandably not happy about its rival gaining access to its brand name in nay form.
Circuit City owns almost 600 superstores in the US. It is reeling from tough competition from its main rival, #1 Best Buys, and ran a slight deficit despite $9 billion in sales. It has recently closed 19 money-losing stores and also stopped selling appliances. In 2002, it also sold off its CarMax user car sales company. More recently, Bank One bought its store credit card business. Analysts wonder whether the InterTAN distraction will be a hindrance to the company's recovery.
One thing Circuit City says it hopes to get from InterTAN is its privately labeled consumer electronic products to sell along with brand name products. The chance of higher markup on in-store brands may give the company a measurable advantage.
5:54:48 PM 
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