Less than a year after moving most of its operations from Colorado Springs to Indiana and Utah, online discount electronics retailer Tech For Less is moving back to the Springs after its founders bought the company back from the Massachusetts firm they had sold it to four years ago.
Encore Holdings LLC acquired the assets of Tech For Less this month from Waltham, Mass.-based ModusLink Global Solutions Inc. for $1.55 million, ModusLink told stockholders recently in a filing with the Securities and Exchange Commission. ModusLink had stockholders just days earlier that it planned to sell Tech For Less to focus on its global supply chain and logistics business.
ModusLink said Tech For Less lost $11 million on sales of $25.9 million in the fiscal year ended July 31, or nearly one-fourth of ModusLink’s operating loss for the year.
Rick Parker, who led a team of three Tech For Less founders who formed Encore, said Tech For Less has hired 40 people since the deal was completed and plans to hire up to 60 more by June as it moves the business back to the Springs and reopens the company’s outlet store at 1610 Garden of the Gods Road.
Parker was vice president of Tech For Less from 2001 to 2010 and now is president; his partners at Encore include Robert Irwin, who serves as vice president of Tech For Less and was its sales director from 2001 to 2010, and Don Horning, who handles inventory management for the company.
“It’s not often you can pick up 1.5 million customers, an existing website and inventory for this price,” Parker said. “The business was profitable for the eight years we owned it. We believe we have a recipe and know what works. We did this because of a commitment to the city and wanting to make a difference. We believe the focus of the company had moved off the customer, and we will make sure that our customer experience is spot on.”
Tech For Less is moving merchandise back from Indiana, receiving up to three truckloads a day, and expects to complete the move within three weeks; it plans to reopen its outlet store by mid-March, Parker said. Encore began talks with ModusLink in October to acquire Tech For Less, he said.
Tech For Less laid off 87 employees and closed its local retail store last March when ModusLink announced plans to move most of the Tech For Less operations from the Springs to Bloomington, Ind., and its customer service operations to Orem, Utah.
“When (ModusLink) moved Tech For Less out of Colorado Springs, they lost a lot of expertise and experience that had a lot of value to the business,” Parker said. “We have been bringing back a lot of very competent, experienced and hard-working people who were laid off during the move.”
ModusLink acquired Tech For Less in 2009 for $31 million; the company’s sales peaked at $40 million the year it was acquired. Tech For Less sells surplus new and refurbished computer equipment and other consumer electronics gear online. The company was started in 2001 out of the ashes of the failed local online retailer Firesale.com.
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