Simply Mac bankruptcy: Who to call, what happened, and why

AppleInsider

On June 9, Apple dealer Simply Mac abruptly closed. Here's what happened, how service customers affected by the sudden shutdown can get help -- and how to buy assets from the shuttered company.

Simply Mac logo

Based in Salt Lake City, Simply Mac was founded in 2006. It provided Apple device repairs for consumers and sold accessories such as cases, cables, and chargers.

Gamestop acquired the company in 2013 to bring Simply Mac to areas that didn't have official Apple Stores as a Premier Partner. Eventually, Gamestop divested Simply Mac in 2019, and Cool Holdings, Inc. acquired it in September 2019.

Many Simply Mac stores were closed during the pandemic, although in 2020, Cool Holdings announced reopenings of stores in Oregon and Florida. That wasn't enough treading to keep the company afloat, and in 2022 Cool Holdings announced the shutdown of all Simply Mac stores.

Court records reveal that proceedings started on June 28. Creditors are being added to the case, including CB&L & Associates Management, Gamestop, Sunrise Mills Limited Partnership, and others. Creditors may begin to file claims.

The trustee in the bankruptcy case is George B. Hofmann in Salt Lake City, Utah. Trustees in a Chapter 7 filing perform duties such as collecting and selling the debtor's property, distributing proceeds to creditors, and other legal roles.

Simply Mac Saga

In a letter to staff members seen by AppleInsider in June 2022, Cool Holdings CEO Rein Voigt said the company was blindsided by the start of the pandemic in December 2019. As a result, it filed for Chapter 7 bankruptcy and will be liquidated.

Voigt also wrote in a statement that the company was helped with $5.1 million in PPP loans from the U.S. government, but new funding wasn't available after that.

The pandemic wasn't the only thing affecting Simply Mac, however. It has faced controversies in the past and some argue that these helped contribute to its demise.

In one instance, store manager Thomas Lotz filed a lawsuit [PDF] against Simply Mac in 2017, saying the company committed payroll fraud by classifying store managers as exempt under federal overtime laws and not paying overtime compensation.

Additionally, some AppleInsider readers claim that Simply Mac didn't shut down because of the COVID-19 pandemic. Rather, the assertion goes, it was because of payroll fraud, with sexual harassment also included in the accusation. These readers say they were employed by Simply Mac or knew someone who was.

Customer Compensation

The company cannot pay its employees due to its bankruptcy, but Voigt said they will receive a notice from a court and can submit claims.

Simply Mac notified employees of their termination and ordered them to turn in their keys to the retail stores. However, store managers weren't told how to return devices to customers, only that they had to lock the store and leave.

Customers of Simply Mac are frustrated that stores are closed. In Idaho and everywhere the chain operates, stores were closed despite having multiple device repairs in progress.

Simply Mac store in Oregon. Credit: localdatabase.com

In Waco, Texas, one customer got the local police department involved, with officers saying the situation could rise to theft of property. The woman, Sharlene Reyes, was finally able to get her laptop, and Simply Mac refunded the diagnostic fee.

In Tennessee, Simply Mac customer Anna Teeples left notes on the storefront. Her MacBook Pro was in the shop for repairs and was her sole means of running her business. Other customers of the store did the same.

Even landlords of Simply Mac properties were left hanging. One mentioned that the court proceedings forbade him from entering the store or showing it to future tenants.

There is some hope for customers of Simply Mac who have devices stuck inside the company's retail stores. In an email sent to AppleInsider, an Apple spokesperson said that the company has notified people who have devices stuck in Simply Mac's repair process.

"The customer very likely has already heard from Apple," the company said to us on July 5. "If they have not, they should call 1-800-MY-APPLE and let the team member know they're calling about SimplyMac."

Stores being auctioned off

As of July 21, 2022, the US Bankruptcy Court has begun auctioning off Simply Mac stores. "This auction is for the entirety of the store," say all of the listings published so far, "fixtures and all assets within."

Interior of Simple Mac's Waco, TX, store. (Source: auctioneer Dudley Resources)

On July 21, the Simply Mac store in Charlottesville, VA, was sold for a bid of $8,100. On July 27, the store in Hillsboro, OR, seemingly went for only $550, though it's not clear how much stock was the store.

Simply Mac stores in Myrtle Beach, Waco, Orlando, Tallahassee, and Lubbock are due to go under the hammer

Read on AppleInsider

Beats

Makes me think either Apple supports these partners more or build more Apple Stores.

Partners closing don’t help Apple in any way unless Apple replaces them.

MacForce

We certainly sympathize for those who have struggled before and during the pandemic. SimplyMac originally had three locations here in the Portland OR area. MacForce is now the only independent Apple Authorized Service Provider anywhere in the area. We are here to help with any warranty and non-warranty service in the Portland area.

danox

JP234 said:

I worked as a service writer and later purchasing manager for an Apple authorized VAR named MacSpecialist for 12 years. It wasn't pandemics or payroll fraud or any internal issues that caused our demise in 2014. It was the relentless pressure on margins by Apple, Inc. As a B-level reseller, we received 7% margin on consumer Macs, 4-6% on iOS devices, and 10% on pro level Macs, which started out as Mac Pros and MacBook Pros. Then Apple dropped the margin on the MBP to 7%, and made iMacs powerful enough that the really expensive Mac Pro was almost impossible to sell. Consider that virtually ALL our consumer sales were by credit card, and our processing fee was 3.5%, and you can see that it became impossible to make a profit on hardware. Additionally, any business loans we had charged greater interest than our margins. We held on for a while with our training classes and service department. Then Apple started soldering memory on the logic board, making profitable upgrades impossible, and proprietary SSD storage, thus removing our ability to upgrade hard drives. They charged us the same rate a customer would pay, to send in Macs that were no longer under warranty. You'll notice you don't see that network of small-business Apple sellers anymore, and this is why.

Of course Simply Mac and almost all VARs went bankrupt. Apple wanted all of us gone, and they had the resources to make it happen. As is their right. That's capitalism, and for every penny I lost in salary, I made back $100 by buying Apple stock every week since the return of Jobs. Was it insider trading? Not exactly, but certainly I was privy to directions Apple was heading before the general public, and believed in that direction.

All that said, I believe Apple is the greatest company in the world, and being even peripherally involved with the ascendancy was the greatest time of my career.

Pretty much explains why Apple doesn’t want to sell servers and why they made local dealers (at the time) refer all school districts directly to Apple for sales.

At the time Apple started to open their own Apple stores, there weren’t that many independent die-hard Apple retail stores left around to begin with, and Apple then when on to screw them.

I also when on to buy Apple shares lots of them, a Commodore Amiga survivor…..

Guitar Center was a great place to buy Atari, Mac, and Amiga products under one roof.

sconosciuto

Cool Holdings was involved in a pump-and-dump on their sketchy AF penny stock a few years back. I looked into it (there was a bit of a hype about CH being a great way to play Apple without paying the then-nosebleed price of AAPL shares)... hoo boy. It was very clearly a company with no legitimate future and zero prospects, especially with Apple making it very clear it didn't care for little guy resellers/service shops.

Do a web search on "cool holdings pump and dump", you'll see what I mean.

Of course they screwed all their customers and employees (many - but clearly not all of them - legally, sadly). It was nothing more than a typical late-stage capitalist loot-and-flee scam scheme.

darkvader

Beats said:

Makes me think either Apple supports these partners more or build more Apple Stores.

Partners closing don’t help Apple in any way unless Apple replaces them.

Apple does not care AT ALL.

They're trying to make it impossible to operate as an authorized reseller or repair provider.  The only way to survive long term at this point is to go unauthorized.  The Apple store repair price including labor is typically identical to the part cost for authorized repair providers.  For dealers, the margin on a lower end Mac can be under the credit card percentage.  Warranty repair rates have been cut.

You have to drive farther to an Apple store?  Not their problem.  You can always mail it in.  Data preservation?  You should have had a backup.  Weeks without a computer while it's shipped off to Pegatron?  You're too poor to have a spare?  Not their problem.

sconosciuto

JP234 said:

for every penny I lost in salary, I made back $100 by buying Apple stock every week since the return of Jobs. Was it insider trading? Not exactly, but certainly I was privy to directions Apple was heading before the general public, and believed in that direction.

Congratulations on your very wise investment and tremendous returns on AAPL.

I did much the same 20some years ago when I was working as a contractor to a major convenience store chain that was acquired by another, much larger company. I had just enough inside scoop to know this was a company to put money into, but not so much knowledge that I had to concern myself with possibly being involved in 'insider trading'. That sounds a lot like the position you were in, and it is absolutely not insider trading.

It's an ideal position to be in, actually. You know just enough to put your money into it, but nothing so specific that it could lead to (theoretical) trouble.

I have literally made millions simply from a hunch that a lot of good things would flow from Jobs' return to Apple. My only regret is that I didn't shovel every last dollar I had into it, I'd have many millions more by now.

As for my other investment... it wasn't very long before the company was taken private again in a VC buyout. Eventually I ended up with stock in two Fortune 100 companies from my modest investment and they pay me decent dividends that I never would have gotten from that c-store chain's stock. I have not checked lately, I forget whether it was a 10-bagger or a 20-bagger. Impressive considering my initial investment, even if the present value is hardly life-changing.

zoetmb

Dealer margins have been cut to almost nothing by almost everyone.  These companies don’t seem to believe in the age of e-commerce that they need the retailers.   

Back in the 1970’s, I sold audio equipment for a NYC-area department store chain. If a customer bought a system (turntable, amp or receiver and speakers), we automatically gave them a 30% discount.  That would be impossible today.   Wholesale was generally 50% of list. 

In the 80’s, I worked for a publisher and we developed for Apple ][ (and Commodore, IBM and Radio Shack). In addition to the free hardware Apple would send, we could buy additional hardware for 50% of list. I believe that was also the wholesale price in those days. 

Most other companies have put the squeeze on retail margins in recent decades, including Sony and Nikon.   That’s one of the reasons there are so few independent photo and electronics independent retailers left. Those that have survived have done so by selling extended warranties and accessories like cables that are still high margin. 

One NYC chain now devotes about 25% of its floor space to mattresses, which are also still high margin. 

I don’t blame Apple for pushing its own retail and its own e-store.  But it has pissed me off royally that end users can no longer replace/upgrade the battery, storage and memory in Mac laptops like we used to be able to do.  For a company that claims to be Green and environmentally conscious, in this regard it’s quite the opposite.  

Apple wants $600 to replace the battery in my MBP (late 2016).  There’s no reason why memory and storage can’t be plug and play as it used to be. 

sunman42

zoetmb said:

Apple wants $600 to replace the battery in my MBP (late 2016).  There’s no reason why memory and storage can’t be plug and play as it used to be. 

If you are brave and reasonably handy (and have a well-ventilated workspace), iFixIt will show you how to replace the battery yourself, as well as selling the battery ($140) and tools necessary to do the job. 

hammeroftruth

Thankfully, there are still some small mom and pop repair shops that perform out of warranty repairs or repairs Apple doesn’t want to. That’s how Apple is kept honest when technicians discover flaws that Apple would rather keep quiet or blame the end user for causing like the 6+ logic board issue or the short video cable on MacBook Pros that they denied for years. 

This is one of the reasons why Apple has the problem of its retail employees wanting to unionize. You get rid of the authorized repair shops and now everyone has to go to the Apple Store, yet you don’t plan on hiring more employees or paying a higher wage in order to meet such high demand. You can’t have it both ways. 

macuserosu

Apple wants $600 to replace the battery in my MBP (late 2016).  There’s no reason why memory and storage can’t be plug and play as it used to be. 

Seems like a made up number as Apple advertises a $199 out of warranty battery replacement for all MBP…

https://support.apple.com/mac/repair/service

ramanpfaff

Rough. I'm in Bend OR right now and owner posted a note on the door about who to call.  

xbit

darkvader said:

Apple does not care AT ALL.

They're trying to make it impossible to operate as an authorized reseller or repair provider.  The only way to survive long term at this point is to go unauthorized.  The Apple store repair price including labor is typically identical to the part cost for authorized repair providers.  For dealers, the margin on a lower end Mac can be under the credit card percentage.  Warranty repair rates have been cut.

You have to drive farther to an Apple store?  Not their problem.  You can always mail it in.  Data preservation?  You should have had a backup.  Weeks without a computer while it's shipped off to Pegatron?  You're too poor to have a spare?  Not their problem.

I had a problem with my Apple Studio Display recently and Apple insisted that I take it to a store to get repaired. No mail-in option was given. When I asked what would happen if I lived somewhere remote, I was assured that Apple had a large network of authorised service centres. I was also directed to a third-party store when I had a problem with my MacBook Pro and the London Regent Street store was closed for renovation.

It's bizarre that Apple treats these businesses so poorly when it still relies on them.

mikethemartian

danox said:

JP234 said:

I worked as a service writer and later purchasing manager for an Apple authorized VAR named MacSpecialist for 12 years. It wasn't pandemics or payroll fraud or any internal issues that caused our demise in 2014. It was the relentless pressure on margins by Apple, Inc. As a B-level reseller, we received 7% margin on consumer Macs, 4-6% on iOS devices, and 10% on pro level Macs, which started out as Mac Pros and MacBook Pros. Then Apple dropped the margin on the MBP to 7%, and made iMacs powerful enough that the really expensive Mac Pro was almost impossible to sell. Consider that virtually ALL our consumer sales were by credit card, and our processing fee was 3.5%, and you can see that it became impossible to make a profit on hardware. Additionally, any business loans we had charged greater interest than our margins. We held on for a while with our training classes and service department. Then Apple started soldering memory on the logic board, making profitable upgrades impossible, and proprietary SSD storage, thus removing our ability to upgrade hard drives. They charged us the same rate a customer would pay, to send in Macs that were no longer under warranty. You'll notice you don't see that network of small-business Apple sellers anymore, and this is why.

Of course Simply Mac and almost all VARs went bankrupt. Apple wanted all of us gone, and they had the resources to make it happen. As is their right. That's capitalism, and for every penny I lost in salary, I made back $100 by buying Apple stock every week since the return of Jobs. Was it insider trading? Not exactly, but certainly I was privy to directions Apple was heading before the general public, and believed in that direction.

All that said, I believe Apple is the greatest company in the world, and being even peripherally involved with the ascendancy was the greatest time of my career.

Pretty much explains why Apple doesn’t want to sell servers and why they made local dealers (at the time) refer all school districts directly to Apple for sales.

At the time Apple started to open their own Apple stores, there weren’t that many independent die-hard Apple retail stores left around to begin with, and Apple then when on to screw them.

I also when on to buy Apple shares lots of them, a Commodore Amiga survivor…..

Guitar Center was a great place to buy Atari, Mac, and Amiga products under one roof.

I think the home computer that impressed me the most for what it could do the year it came out was the original Commodore Amiga in 1985.

mikethemartian

There was a store here in Florida nearby that sold used Macs that seemed to be a part of a store chain that went out if business after a couple of years.

mknelson

macuserosu said:

Apple wants $600 to replace the battery in my MBP (late 2016).  There’s no reason why memory and storage can’t be plug and play as it used to be. 

Seems like a made up number as Apple advertises a $199 out of warranty battery replacement for all MBP…

https://support.apple.com/mac/repair/service

Unless they aren't quoting $US - $199 (after currency conversion) matches the charge in Canada.

chadbag

macuserosu said:

Apple wants $600 to replace the battery in my MBP (late 2016).  There’s no reason why memory and storage can’t be plug and play as it used to be. 

Seems like a made up number as Apple advertises a $199 out of warranty battery replacement for all MBP…

https://support.apple.com/mac/repair/service

The $600 fee is not just battery replacement.  It is Apple’s flat rate repair price which basically will replace any part that needs to be replaced to fix the MBP.  They had/have two flat rate prices.  One with screen and one with everything but screen.  Iirc I paid $600 with screen. 

The “problem” with batteries is that they often expand or puff up when they fail which can stress the main board and break stuff.  In my case the battery had expanded and caused a fault such that it wouldn’t always boot and had messed up video.  But it was all because of a battery problem.   

Anyone who pays $600 and all they get is a new battery should go talk to the manager.  I got basically a whole new machine.  There was only one piece of the case from the original MBP that was re-used when I did it. 

chadbag

Not sure why Simply Mac felt it needed to close stores during the “pandemic”.  Maybe for a month or three but most stores Re-opened around here (ironically SLC area) really quickly.  I took my work MBP into Expercom for warranty repair in summer 2020.  They limited the number of people in the store at once but you could go in and buy or get repairs.  

takenin

Hello All,

Please forgive me for reviving an old thread, but as a newbie, I didn’t know where to post this, or even where to post a first-thread introduction of myself, first, if in fact one exists.

I had to buy a new 4 TB MacBook Pro via Apple's online store, since Simply Mac could not offer me one.

On 01/09/2021, I purchased a Simply Mac’s Simple Care/Simple Care+ four year warranty on it, for $599.99, through Safeware.

When that four year contract expired, I was told I could renew it, which is why I chose not to purchase AppleCare.

Unbeknownst to me (until January of 2023), they declared bankruptcy somewhere around 06/21/2022, so I started to panic.

In January of this year, I tried numerous times to speak with a live Safeware rep (I tried every “press this number” combination that the recorded voice offered), but to no avail.

I then contacted Safeware via email with all the pertinent information they would need to verify my contract, and inquired as to who would I take the MBP for repair ‘IF’ and when it needs to be repaired (it didn’t/doesn’t).
I even asked if they would reimburse Apple if I needed to take it there.
I have not heard from them since.

I tried the “press this number” phone dance for twenty minutes again today, with the same negative results.

Do I need to contact the BBB or Consumer Affairs to get Safeware to contact me and address the issue, one way or another?
If they won’t reimburse any other shop to fix it, including Apple, I’m thinking I should get some sort of pro-rated refund?

Thanks in advance for any light shined on this issue, and for also reading this rather lengthy post.