By Victor Flores
The intersection of Harlow Road and Gateway Street in Springfield, Ore. is by no means a quiet one. Cars can be seen whizzing by the several establishments that line the area throughout the day.
Perhaps the biggest draw in this area is the Gateway Mall, which starts at Harlow Road and continues for hundreds of yards to the north on Gateway Street. The sixty-plus stores on the property see large numbers of customers every day. But among all of this business, two stores stand out like large skin bruises.
The first is Circuit City, which is right by Harlow near the bridge that transitions from Eugene into Springfield.
A few hundred feet to the northeast is Hollywood Video – or what used to be Hollywood Video, at least (its building was demolished in late January).
Both of these stores were shut down in 2009, and haven’t seen a customer walk through their doors at any point since.
Circuit City was one of the largest electronic corporations in the nation before it went completely bankrupt in 2008 (The company liquidated all of its stores and its entire workforce in 2009 after failing to find a buyer). Behind Best Buy, no electronics company employed more people or made more sales than Circuit City in the handful of years before it went out of business.
There were many factors that led to Circuit City’s end. Alan L. Wurtzel, the founder’s son who held many high-level positions at the company from the 1970s to the 2000s, was extremely disappointed at time of the company’s bankruptcy.
According to an Associated Press report written in January 2009, Wurtzel had previously said multiple times that “Circuit City didn’t take the threat of rival Best Buy Co. seriously enough and, at some points, were too focused on making a profit in the short term instead of building long-term value.”
Later in 2009, Systemax, Inc. bought the Circuit City brand name and relaunched the former company’s website. In 2012, Systemax combined Circuit City, CompUSA, and TigerDirect (two companies Systemax had acquired before Circuit City) into TigerDirect, eliminating the Circuit City name from any of Systemax’s stores.
The Circuit City in the Gateway Mall was one of the 567 stores the company closed in 2009. It had been in the mall for over a decade. As the AP article mentions, Best Buy might have been a contributor to the downfall of Circuit City, and this line of thinking could easily apply to the mall’s Circuit City. Best Buy built a store just about a block to the north of Gateway Mall years before Circuit City went out of business.
Diane King is a universal associate at Umpqua Bank located in the Gateway Mall, and she also believes that Circuit City faced too much competition.
“Best Buy has negated [Circuit City’s] loss,” she says, referring to the company of Best Buy, as a whole, as well as the Best Buy store located near the mall.
Even though King often shopped at Circuit City before it closed, she says she was not too distraught when it went out of business.
Skip Sandgren, the general manger of the Gateway Mall, mentions another possible contributing factor to Circuit City’s downfall.
“2009 was right in the heat of the recession,” he says.
Sandgren did not start working at the Mall until 2010, but he, like King, has never been too worried about Mall business being negatively affected by this large, vacant electronics store.
Laura Miller, the senior team lead at Gateway Mall’s Target, was not quite as stress-free after Circuit City was shut down.
“Although I wasn’t surprised that they went out of business, I was a little afraid that them closing would hurt business at our store,” she says. “But it hasn’t really affected Target in the years since it closed.”
Like Circuit City, Hollywood Video was also #2 in its line of business. In the 2000s, Blockbuster was the top video rental store company in the nation, but Hollywood Video was not far behind until it went bankrupt in 2010.
The company was founded in 1988 near Beaverton, Ore., and it remained a fairly small company for a few years. There were only 16 Hollywood Video stores in the United States by 1993, but that was the year when the company became public. But by the end of the decade, the company had expanded exponentially. Right before its owners filed for bankruptcy, there were about 1,100 stores nationwide.
Many people point to the increased popularity of online streaming, on-demand TV movies, cheap and convenient DVD services like Redbox, and receiving DVDs in the mail as reasons why almost every video store — not just Hollywood Video — have struggled so much the past few years.
In her 2010 Register-Guard article, published right after Hollywood Video went bankrupt, Sheri Buri McDonald writes, “Consumers eventually will dispense with cumbersome discs and videos in favor of digitally streaming movies through whatever device they want to watch, according to industry analysts.”
Blockbuster was going through some of its own struggles at that time, as well. McDonald writes, “Blockbuster says it shut down 374 U.S. stores last year, and it plans to close as many as 545 more this year, leaving it with about 3,000 U.S. stores.”
Again, this was in 2010. In January of this year, Blockbuster closed 300 more of its stores, leaving the company with just 500 left.
Alicia Ness is a co-worker of King at Umpqua Bank. Ness has been working at Umpqua since 2007, so she has her share of memories about the nearby Hollywood Video store — which is only about 100 feet away from Umpqua — before it went out of business.
“Barely anyone walked in before it closed down,” Ness says.
Although the company of Hollywood Video went bankrupt in 2010, the Gateway Mall store closed down in October of 2009, and Ness attributes this early shut-down to the complete lack of customers the store was receiving at that time.
Don Strouf, the frame shop manager at Ben Franklin Crafts and Frame Shop (located in an area between Harlow Road and the Gateway Mall), wholeheartedly agrees.
“Hollywood Video was a dying horse,” Strouf says. “When [the Hollywood Video at the Mall] closed, I don’t think many people realized it because hardly anyone ever went there.”
For over three years, both Circuit City and Hollywood Video have been sitting completely vacant in the Gateway Mall. This will change in 2013.
Strouf loves Wal-Mart and plans to go there on many future lunch breaks. He’s just as excited for Buffalo Wild Wings, saying that the restaurant has an ideal sports bar atmosphere.
“For Ducks games, no place will be better,” he says.
Ken Villalpando, an assistant manager at Big 5 near the mall, expressed similar thoughts. He isn’t as much of a Wal-Mart or Buffalo Wild Wings fan as Strouf is, but he is more than happy to see fresh businesses coming into the area.
“Anything new will help,” Villalpando says.
Several people have asked Villalpando if he is afraid that the new stores will take away from Big 5’s customer base.
“I just tell them about Cabelas,” he says.
Cabelas is a store that specializes in outdoor equipment. The company opened a store on the western side of the Gateway Mall about two years ago, becoming the first one to appear in the state of Oregon.
Villalpando says that he had some fears of losing customers when Cabelas showed up, but Big 5’s customer base actually increased after it arrived. He believes this will happen on an even larger scale when Buffalo Wild Wings and Wal-Mart come along.
Sandgren says that the Gateway Mall has had “significant interests” in both companies since he arrived in 2010, so he is very excited that they will officially be coming. He is especially excited about Wal-Mart because there are not many other grocery stores in the area.
Sandgren, Villalpando, Strouf and Ness all mentioned another thing they’re excited about with the coming of these new stores: job creation. Ness says that even though the shut-downs of Circuit City and Hollywood Video were not surprising and hardly affected her, she still felt a tremendous sense of sympathy for all of the employees who were sent packing. Knowing that new opportunities will be available at these stores is very comforting to her.
According to The Register-Guard article written by Ilene Ashire, there will be 65 people employed at the new Wal-Mart. The number of people laid off from the previous tenant, Circuit City: 65.
Workers in and near the Gateway Mall don’t believe the amount of customers going to Wal-Mart and Buffalo Wild Wings will be as evenly distributed. They expect huge numbers of people to shop at these two places, but even if this prediction doesn’t become true, they won’t be too disappointed. To them, any business is better than none.
Q&A With Skip Sandgren
Skip Sandgren is the general manager of the Gateway Mall in Springfield, Ore. He has held this position since August of 2010. He discussed the out-of-business Circuit City and Hollywood Video stores, as well as the Wal-Mart and Buffalo Wild Wings that will soon be replacing them.
Were you worried about the empty Circuit City and Hollywood Video stores negatively affecting business at the Gateway Mall when you arrived in 2010?
Not really. It definitely wasn’t ideal, as both stores are in prime locations in the Mall, but I didn’t worry that they would ruin business. We were also in talks with several companies in 2010, including Wal-Mart and Buffalo Wild Wings, about replacing these out-of-business stores. We never felt like this would be a long-term issue.
What do you think were the main causes of these two companies’ bankruptcies in 2009?
Well, first of all, 2009 was right in the heat of the recession, so that certainly didn’t help. Also, neither company really changed with the times. Video stores like Hollywood Video didn’t have good business models for the changing habits of 21st century consumers. Electronic stores like Circuit City were no different.
Do you think the internet has been a major contributor to the decline of these types of companies?
The internet didn’t necessarily change everything. It certainly has had an effect, but I think it has more to do with changing habits. Similar things have happened with book stores. I just think people are changing the way they consume these types of products, whether it is through the internet or otherwise.
Are you excited about Wal-Mart and Buffalo Wild Wings coming to the mall?
Absolutely. We had significant interest in both stores in 2010 and we’re very glad that we could finalize everything with them. We’ve needed a grocery store in this area for a long time, and Buffalo Wild Wings is a popular restaurant, so I think they will fit in very nicely.