Springs-based electronics outfit in good hands

Colorado Springs-based Tech for Less is in transition, with a new man at the helm and ambitious plans for the future.

The privately held business, which sells new and refurbished computer equipment and consumer electronics online and at a local outlet store, has steadily grown since its founding in 2001. But there have been growing pains, managers acknowledge, including the layoffs this past week of about 35 employees, or 15 percent of its work force.

Those job losses are the result of streamlining management and administrative functions and cutting production shifts - which involve receiving, testing and, when necessary, repairing and refurbishing products - from three to two, said Jason Lockwood, the company's new president and chief executive officer.

Tech for Less recently moved those production duties to leased space at the former Hotsy building at 2150 Garden of the Gods Road. The headquarters and retail outlet remain at 1610 Garden of the Gods. The new space made it possible to spread out operations and convert to the two shifts - gaining efficiencies while also gaining space at the original location for more inventory, Lockwood said.

"A lot of departments, we had grown our head count so quickly that perhaps we weren't doing things as efficiently as they could be done," he said. By staying lean, he said, Tech for Less is better able to keep prices low. It employs about 200 after the cuts.

Lockwood, former president and CEO of Cincinnati-based U.S. Playing Card, joined Tech for Less in April. He replaced Brad Taylor, who had been president and CEO since the company's inception. The search for his replacement, Taylor said, began about a year ago.

"The impetus was we wanted to bring in a new leader, give me an opportunity to step back and take a little bit of a breather, and make sure the company continues to grow," said Taylor, who retains a stake in the firm and remains as an executive adviser.
Tech for Less began with about a dozen employees, born out of the ashes of Firesale.com, a local online retailer. In late 2006, Tech for Less sold a majority stake to Dixon Midland, a private-equity firm based in Chicago, in a move made to fuel growth, Taylor said.

Sales throughout the years have grown at a compound annual rate of 25 percent, Taylor said. The company expects to do about $50 million in sales this year.

"Tech for Less is a great growth story so far," Lockwood said. He thinks the company is capable of even greater growth - "two or three times this large in the next three to five years" - and could possibly expand into categories beyond consumer electronics, such as appliances.

The recession hasn't slowed the company's sales. In fact, Taylor said, tough times may help sales, as consumers look harder for bargains. But the economic downturn has caused turbulence in the company's supply chain. Much of the merchandise sold by Tech for Less comes from overstock and liquidation supplies and customer returns at other stores.

So when Circuit City went out of business, for example, it could be viewed as the loss of a competitor but also the loss of a supplier.

The inventory at Tech for Less is constantly changing, Lockwood said, with as many as 13,000 products at one time. Since there may be as few as one of any given item, customers are urged to act quickly if they spot something they want.

"That's what makes it fun," Lockwood said. "For the consumer, it's never the same Web site twice."

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Contact the writer at 636-0272.