Egghead can't crack the downtown market Software seller to close city store.

April 12, 1991|By Kevin Thomas | Kevin Thomas,Evening Sun Staff

Egghead Inc., which rode the 1980s wave of expansion by opening a dizzying 200 of its Egghead Discount Software stores nationwide, is admitting it wasn't smart in picking its downtown Baltimore location.

The downtown Egghead, which debuted three years ago at the corner of Lexington and Calvert streets, will close tomorrow. Egghead spokeswoman Megan McKenzie said the store was the victim of slow sales and decisions by former managers who were over eager in their expansion of the firm's operations.

The Issaquah, Wash., company was founded in 1984 and underwent a period of rapid expansion. In 1989, new management was brought in to run the company, at which point Egghead did some rethinking, McKenzie said.

Company officials concluded that in some regions, including Baltimore, there were simply too many Egghead stores in unprofitable locations.

The company also has stores in Severna Park, Towson, Laurel and Annapolis. In addition, there are four Eggheads in the Washington, D.C., area. An Egghead store in Pikesville closed April 14, 1990.

McKenzie refused to discuss specifics of the company's downtown location, saying only that the store was "not as profitable as expected."

When it was founded in 1984, Egghead was the nation's only pure software reseller. Until that time, software was a sideline for computer retailers. But the industry quickly drew competitors, many of whom opened locations in major malls and retail centers.

9- David Gillece, president of the Baltimore

Economic Development Corporation, said Egghead's downtown location -- a "stand-alone" operation on a corner that was not part of a larger retail center -- was probably a bad choice for the company, although another retailer would probably have fared better there.

Gillece said he was not alarmed by Egghead's departure since at least five other computer supply stores in the downtown area are apparently not suffering similar problems.

"We don't like to lose anybody," said Gillece. "But I wouldn't draw any larger implications from a single tenant making a business decision downtown, and especially a tenant who was operating out of a site that was not part of a retail mainstream."

While Egghead has gone through a period of weeding out stores across the country with poor showings, McKenzie said Egghead will continue to expand and is planning to open between 10 and 30 new outlets in fiscal 1992.

McKenzie would not discuss the possible locations of new stores, nor would she rule out the Baltimore area.

"I do not want to give anyone the impression that the Baltimore area has not been good for Egghead," she said. "The Baltimore market is very strong for us. We're very proud of the performance of our other stores."

Marcia A. Raley, of the Minnesota-based Dain Bosworth brokerage, confirmed that Egghead's management has been successful in unscrambling the company's problems. Raley said Egghead has shown consistent improvement since new management took over less than two years ago.

Currently, there are about 185 Eggheads nationwide.

The downtown store's employees have been offered jobs at other Eggheads, McKenzie said.

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