Business: Fry’s Electronics goes out of business permanently, closes all stores.
A Bay Area institution: Eclectic store, which plugged in with techies for 36 years, victim of change in consumer habits
SAN JOSE >> The iconic Fry’s Electronics, a destination for geeks before the world turned geeky, ended a 36year run Feb. 24 and closed all of its stores.
A Bay Area institution that opened its first store in Sunnyvale in 1985, Fry’s quickly became a shopping and cultural destination, with themed stores that sold everything from candy to routers to refrigerators, cameras and computers.
“For Silicon Valley engineers, Fry’s was the goto place,” said Tim Bajarin, principal analyst with Campbell-based Creative Strategies, which tracks the tech sector. “Tech engineers went there not only to buy electronics but also to get snacks.”
In a statement on its website, the San Jose-based company blamed the shutdown of its 31 stores in nine states on the challenges of the pandemic and changes in the retail industry. The company was hit hard when customers began rejecting brick-and-mortar outlets for shopping online.
Fry’s executives did not return phone calls seeking additional comment.
The company’s struggles have been widely telegraphed. Customers complained of bare shelves, and stores began closing. The Western-themed Palo Alto store closed in late 2019 and the Campbell store with an Egyptian pyramid theme closed in November.
At the time of the closing announcement, Fry’s had Bay Area stores in San Jose, Sunnyvale, Fremont and Concord.
When Brian King, a video producer for an autonomous car company, moved to the Bay Area five years ago and started working at a technology firm, he was immediately ushered to a store he knew well from his time in Southern California.
“One of my managers just drove me to Fry’s and said, ‘Buy what you need. Get your cables, get your keyboard, let’s get you working.’ ”
It was Fry’s in Burbank where King had bought the materials to make his first PC, a “Hackintosh,” he said.
“It fostered people’s interest to build things,” said King, 35, of Redwood City. “You could go to Fry’s with your allowance and get these parts, get the tools and ride your bike home with them. People would go to Fry’s to buy a soldering iron and to buy materials for do-it-yourself tech.”
The company was founded by three brothers, John, Randy and David Fry, who started working in their father’s grocery
business, Fry’s Food Stores. The brothers were joined by Kathryn Kolder, who worked for a company that had sold PCS to the grocery business. They created stores that quickly became quirky go-to places with a wide selection and low prices.
Bill Arnold, a Portola Valley resident who frequented Fry’s stores, believes the retailer
played a significant role in the evolution of the Silicon Valley tech sector.
“Fry’s was a techie heaven in its heyday,” said Arnold, who frequently bought ethernet cables at Fry’s, but always avoided the temptation of buying a computer. “It was like having an old-style corner drugstore, but one that was for electronics.”
At one point, revenues at
Fry’s were robust enough that the company made Forbes’ list of the largest privately held companies in the United States, ranked by revenue. Forbes estimated that Fry’s generated $2.3 billion in revenue during 2018. By 2020, Fry’s had dropped off the list.
Bajarin and Arnold both said that Fry’s was so influential in its peak years that executives with tech, consumer electronics and computer companies beat a path to Fry’s headquarters, hoping to get their products sold at the stores.
“The people behind the products would line up around the block at the corporate offices to try to convince the Fry’s executives to place their products on the store shelves,” Arnold said. “They knew that if they got the product into Fry’s that it would sell.”
The company would host executives at a golf course called The Institute, built by John Fry in Morgan Hill, Bajarin said. It is so exclusive and secretive that the Golf Pro Now website referred to it as “The Area 51 of California golf.”
But as it struggled, Fry’s switched over the last year to a consignment model. That meant Fry’s was only able to attract suppliers that were willing to be paid for their wholesale goods after Fry’s had sold the items at retail.
“The company will implement the shutdown through an orderly wind-down process that it believes will be in the best interests of the company, its creditors, and other stakeholders,” Fry’s said on its website.
Fry’s also said it would work with its customers regarding orders that were recently placed or necessary repairs.
Ultimately, the demand for online shopping, as well as the push by Dell to offer custom-built personal computers via the internet might have been the key factors to doom Fry’s, Bajarin said.
Plus, Fry’s Electronics might have made a strategic error when it chose to expand well beyond its home roots in tech haven Silicon Valley.
“The buying patterns shifted and they probably expanded too much and over-extended themselves,” Bajarin said.
Still, Fry’s Electronics managed to march ahead for many years against fierce competition that killed off similar retailers earlier.
“Fry’s hung on a lot longer than COMPUSA, The Good Guys, Circuit City, especially in Silicon Valley,” Bajarin said. “Those all bit the dust a lot sooner than Fry’s.”