The Great Neostar Debate |
||
| Contents | ||
|
Leading |
...now had all of these great merger ideas
been carried out a little sooner, things might have been different. In May of 1996, the former president of the Computer City division of Tandy Corp, Alan C. Bush joined the company in the new position of executive vice president- Store Operations. Under Bush, the company finally got around to unifying the three very separate entities of Neostar: Software Etc, Babbage's and Barnes & Noble Leased stores. At the employee level, this had some pros and cons. We could actually do things like transfer product from a Babbage's to a S Etc. On the other hand, Software Etc stores had their entire systems converted over to the Babbage's system. This was was an event that cause a LOT of grumbling and even resulted in some people quitting since they hated it so much. Management changed dramatically in the form of a large number of S Etc district and regional managers getting let go or demoted to store manager, at their option. This lightened up payroll expenses, but problems still lingered in software prices even after an average price cut of $5. I know mall lease expenses had a lot to do with this, but when a store across the street has the new PC game for $15 less than you do (and the funds to advertise that fact), sales just don't skyrocket. This resulted in the selling of the Barnes & Noble Leased stores in July (actually located in B. Dalton and Barnes & Nobles). For $9 million, 136 stores were sold, which were supposedly operating in the red. Even after freeing up these funds, Neostar reported a net loss of $21,503,000 for the second quarter--the largest in the company's history. The lawsuits weren't much of a help, either. The bills were definitely starting to pile quite high. Here's a short list of who wanted their money. |