The encyclopedia · Strategy & Leadership · Strategic decision · 1977–2003
The Wiz grew from 20 to 80 stores in a year, went bankrupt in 1998, and closed by 2003
A New York electronics chain that hit $1.4 billion in sales collapsed after over-expanding, then was shut down by its owner Cablevision.
The Wiz · Cablevision · 2003-02
What happened
The Wiz was a New York City electronics chain founded in 1977 that grew to a peak of 94 stores and $1.4 billion in revenue across several northeastern states. It became a household name in the region's consumer-electronics market.
Growth outran the business. After expanding from roughly 20 stores to over 80 in less than a year, the chain filed for bankruptcy in 1998, and Cablevision bought the struggling retailer out of it for $80 million.
Cablevision's rescue did not last. In August 2002 it closed 26 unprofitable Wiz stores, and in February 2003 it announced it would exit the electronics business entirely, selling or shutting its 17 remaining stores, which had become a money loser.
The Wiz closed permanently in 2003, and in September of that year competitor P.C. Richard bought its assets for $1.8 million, mainly for the name. A regional powerhouse was reduced to a brand sold for a fraction of its former value.
Why it happened
- The chain expanded too fast, from about 20 stores to over 80 in less than a year, and the over-expansion helped drive it into bankruptcy in 1998.
- Cablevision bought the bankrupt retailer for $80 million and then found it could not be made profitable in a weakened retail economy.
- The owner decided the stores were a money loser and exited the business, shutting down all remaining locations by 2003.
The lesson
The Wiz grew from about 20 stores to over 80 in less than a year to chase peak sales, and the expansion drove it into bankruptcy in 1998. Growth that outruns the business is how you lose it.
Aftermath
The Wiz closed permanently in 2003. Cablevision, which had bought the chain out of its 1998 bankruptcy for $80 million, shuttered 26 unprofitable stores in August 2002 and announced in February 2003 that it would exit consumer electronics, selling or closing its 17 remaining stores. In September 2003 competitor P.C. Richard bought the company's assets for $1.8 million, mainly for the Wiz name.
Sources
- Wikipedia — The Wiz (store) (founded New York City 1977; peak revenues of $1.4 billion with 94 stores; after expanding from roughly 20 stores to over 80 in less than a year, filed for bankruptcy in 1998; bought by Cablevision for $80 million; closed permanently 2003; P.C. Richard bought its assets for $1.8 million in September 2003)
- New York Post — Cablevision to exit Wiz biz, shut remaining stores (February 2003: Cablevision planned to exit consumer electronics by the end of the second quarter, selling or shutting its 17 remaining Wiz stores; six months earlier it closed 26 unprofitable stores)
spotted an error? The club wants to know.
More like this
IndexPDX closed its 12-year Portland sneaker shop — Old Town foot traffic never came back
Hanifa's 45%-off sale became a two-month fulfillment mess — then it paused production
H&R Hosiery, the South Bronx shop that dressed hip-hop, closes after 60 years
Somewhere, someone solved the problem this company failed at. 2nd Opinion →
Comments · 0
Sign in to join the comments.