Competition Pushes Silo Out Of Local Market -- Nine Outlets In Area Closed As Pressure From Electronics Superstores Takes Its Toll

Fierce competition from consumer-electronics superstores multiplying in the Pacific Northwest apparently claimed the nine Silo stores in the Puget Sound area, which closed suddenly yesterday.

Silo also has closed stores in Oregon, San Diego and Toledo, Ohio.

Local stores are in Bellevue, Silverdale, North Seattle, Southcenter, Lynnwood, the University District, Bellingham and Everett, Federal Way and Tacoma. Each store employed about 15 workers.

The shutdown was the second time in two weeks that a major appliance retailer closed stores unexpectedly in the state. The 18-store Smith's Home Furnishings chain, based in Wilsonville, Ore., filed for Chapter 11 bankruptcy protection two weeks ago and closed all its Washington stores.

Silo officials refused comment on their closures, issued no public statement and did not return phone calls. A recorded message at stores advised customers with questions to call 1-800-373-8837 or to leave specific delivery questions by calling 575-3196. Both numbers were continuously busy this morning.

The Washington State Attorney General's consumer division is advising Silo customers with problems to call the 800 number first. If they can't get satisfaction through the Silo hotline, they can call the Attorney General's office at 1-800-551-4636, a spokeswoman said.

A final Silo sale is to take place later this week at the company's warehouse at Southcenter.

Silo is owned by Brighton, Mich.-based Fretter Inc., which took over the money-losing chain in 1993 from Silo's parent, Dixons Group Plc of London. In return, Dixons received a large chunk of Fretters stock.

Fretter operates 220 retail stores in 20 states under the Fretter, Silo, Fred Schmid, Yes! and Dash names. Fretter has been closing stores during the past two years, including Los Angeles and Denver outlets.

In a news release June 14, Fretter said its first-quarter sales had fallen 8.6 percent from the previous year. Fretter lost $4.3 million in the first quarter. The company reported a $4.1 million loss in the same quarter a year earlier. Fretter said at the time it would have been in default with its primary lender had the lender not waived certain conditions.

Pressure from new superstores such as Circuit City, Future Shop and Tandy's Incredible Universe is taking its toll on older chains such as Silo, said Saul Yaari, a retail analyst with Piper Jaffray. The newer stores are larger, have more products with the latest technology, and provide better service, he said. "All of that is kind of pushing Silo into extinction."

Silo has done battle elsewhere in the West with consumer-electronics giants and lost. It exited Southern California a few years ago after Circuit City and The Good Guys arrived.

The Puget Sound area has had an onslaught of new electronics superstores since the early 1990s. Future Shop, based in Vancouver, B.C., entered the market in July 1992.

Gary Patterson, Future Shop's chief financial officer, said the consumer-electronics market remains good despite Silo's troubles.

"What you're seeing is customers picking the stores they like best. Whatever the reason - either lack of service or selection or whatever - Silo has not been able to compete as well as others."

Information from Associated Press is included in this report.