Electromart Factory Direct Inc., a longtime Spokane computer and appliance dealer plans to close at the end of the month, after 55 years in business here.
Tightening margins on computer sales, competition from computer manufacturers that increasingly sell their goods directly to consumers, and changes that the Internet has brought to retailing have made operating the store more difficult, says Gary Klaue, one of the owners of the family-owned business.
Gary Klaues father, Byron, founded Electromart as an appliance store in 1945, and Klaue, his mother, and two brothers now own the business, which also uses the name Connecting Point Computer Center.
The 17,000-square-foot store, located at 3611 E. Sprague, specializes in selling Apple Computer Inc. products and also is an authorized dealer for other computer manufacturers, including IBM Corp., Hewlett-Packard Co., and Epson America Inc. A retail computer shop doesnt require as much space as the store has, so the remaining space is used to sell home appliances and electronics and some furniture, Klaue says. The store has about a dozen employees who will be laid off when the store closes, he says.
Klaue says the family hopes to lease out the stores location or may redevelop the property, which is at the northeast corner of the busy intersection of Sprague Avenue and Freya Street.
Margins on computer sales are slim, usually less than the sales tax a retailer must collect, he says.
Electromarts sales of Apple computers grew 34 percent in 1999, but it seems like the harder you work the less you make, Klaue says.
Margins are so tight you must double your business each year just to stay even, he says. You cant do that here. The Spokane economy isnt growing at the same rate as that of the Seattle area or other parts of the country.
In addition, the computer marketplace is becoming increasingly competitive, with much of the competition coming directly from the makers of the equipment themselves.
Our largest competitor is not a local store, Klaue says. Its manufacturer-direct sales.
The Internet has driven changes in how people buy computers, he says. Not only does it directly connect customers and manufacturers, it often allows consumers to duck sales tax on on-line purchases, providing them with a price that local retailers cant match, he says.
The appliance marketplace also has become crowded in recent years. Klaue says. Just a few years ago, a handful of Spokane retailers sold each brand of appliance; now, dozens sell each brand. With that many people selling the same thing, each slice of the pie gets smaller, he says.
He says the choice to close the store also was influenced by not having another generation ready to take over the business as Klaue and his brothers had from their parents. My daughter is only 6, and I dont want to wait 20 years until shes ready to take over, Klaue says.
Closing a family business after so many decades is nostalgic, he says, recalling the changes made over the years. We sold a little of everything, Klaue says.
When Electromart couldnt get appliances right after World War II, the family made and sold Christmas lights to keep the fledgling business afloat. Through the years, the store also sold pianos and organs, drapes, and flooring, he says.
During the 1950s, the business thrived with small stores on Sprague Avenue, North Division Street, and downtown, Klaue says. In 1960, the three small outlets were consolidated into the much larger store on East Sprague.
Electromart pioneered many appliances and electronics in Spokane, Klaue claims. When it began selling microwaves, it offered cooking classes so homemakers could familiarize themselves with the new appliance, he says. Electromart was among the first places in Spokane to rent videos, which it started doing to boost VCR sales, he claims. Also, it was among the first dozen authorized Apple computer dealers nationwide, he says.
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