A former fast-growing consumer electronics retailer is looking to rebound with a push into overseas markets.
San Clemente-based Play N Trade, which operates through franchisees, earlier this month expanded into Central America with a store in Panama City. That followed recent debuts of one store in Colombia and two in Egypt.
The company, which buys and sells new and used video games, consumer electronics and accessories, is seeking markets where competition is scarce.
“We’re hitting markets where our competition has no experience,” said Charles Franklin, executive vice president of franchise development.
That’s a far cry from the U.S. market, which is dominated by Grapevine, Texas-based GameStop Corp.
GameStop owns and operates 6,650 stores in the U.S., Australia, Canada and Europe. The company posted sales of $1.77 billion in the December quarter.
Play N Trade has 138 franchised stores overall, with most in the U.S.
It gets a fraction of the $90 million or so in annual sales racked by its franchisees.
Its lone OC location is in Mission Viejo.
The company topped the Business Journal’s list of fastest-growing private companies based here in 2008, when it had 250 franchised stores. It reported $7 million in revenue at the time, and an annual growth rate of 1,900%.
The company was signing 20 new franchisees a month at its peak.
“We we’re going gangbusters,” Franklin said.
Then came the recession, and by mid-2008 stores began to feel the pinch. Many saw their credit lines slashed, forcing shut downs across the U.S.
Play N Trade put new franchises on hold and began to shift gears.
The company weathered the storm and set out on a new growth plan about a year ago after acquiring Dimension Games Corp. in Canada.
Charles Beaupré, who owned and operated stores under the Dimension banner, took on the role of chief executive at Play N Trade about a month ago.
The company now is rolling out new services to complement retail sales—including repairs on smart phones, tablets and other mobile devices—across its entire network.
“We’re filling that void, and there’s huge demand,” Franklin said.
A typical repair on a smart phone costs about $50, he said.
The new service is projected to grow to account for as much as 20% of a franchise’s revenue. A typical franchise sees between $500,000 and $1.6 million in annual sales.
Play N Trade is seeing growing interest from potential franchisees, fielding as many as 300 inquiries a month.
A new store costs between $135,000 and $200,000 to set up, which includes inventory, building permits, licensing, tenant improvements, legal fees, training at a Chicago-area hub, and a $30,000 franchise fee.
The company has opened up 10 new stores in the last few months and recently inked a deal with a franchisee in the Houston market.
The company is close to reaching a deal to establish a chain of stores in the Middle East as well, Franklin said.
Play N Trade and competitors are in line to benefit from the much-hyped release of Sony Computer Entertainment Inc.’s PlayStation 4 last month. Another potential boon: Microsoft Corp.’s rumored introduction of a new Xbox version later this year.
