Babbage’s remembered

Babbage’s was a software retailer that operated storefronts in closed-air shopping malls. It opened its first store in NorthPark Center in Dallas on Memorial Day, May 30, 1983. By mid 1994, it operated 320 stores in 40 states, Puerto Rico, and Canada, but by 1996, it fell on hard times. Barnes & Noble chairman Leonard Riggio bought the company November 27, 1996.

The Babbage’s concept

In the early 1980s, large department stores sold software, but cofounder James McCurry thought smaller specialty stores were especially well suited to that line of business. He approached his Harvard Business School classmate Gary Kusin with the concept. He liked the idea, and at the end of 1982, they both quit their jobs and looked for investors who would help them open 20 stores to get started.

Their first investor was Ross Perot, the founder of EDS and future presidential candidate. Perot offered a $3 million line of credit in exchange for one-third ownership of the company. He advised the founders to start small, open a single store and manage and operate it themselves until they knew every aspect of the business. McCurry and Kusin took turns opening and closing the store each day. They named the store for computer pioneer Charles Babbage.

The Babbage’s store concept was straightforward: competitive pricing, a constantly updated mix of products, a flexible store design with sections devoted to various computer and game console platforms and software categories, and noncommissioned sales staff that didn’t use technical jargon.

It took two months for Babbage’s to reach the point of needing its first employee. By Labor Day, Babbage’s was ready to open its second store. By Thanksgiving Day 1983, Babbage’s had five locations in Dallas.

How Babbage’s expanded in the 1980s

By 1986, Babbage’s had 23 locations and it broke even for the first time. In 1987, it expanded to 58 stores and turned a $1.16 million profit on $29 million in sales. It went public in July 1988, priced at $13 per share. The money from the IPO allowed Babbage’s to expand to 108 total stores, bringing total sales to $58 million and profits of $2.7 million.

Babbage’s earnings and growth were uneven in the late 1980s and early 1990s, which led to its August 1994 merger with competitor Software Etc. By 1996, the combined company was bankrupt, and Barnes & Noble chairman Leonard Riggio bought the company in November 1996. The buyout resulted in 200 stores closing.

In 1999, Babbage’s tried a new concept, launching 30 stores it called Gamestop. Barnes & Noble bought the company later that year.

In May 2000, Barnes & Noble acquired Funco, the parent company of video game retailer Funcoland. Funcoland, Software Etc., and Babbage’s all consolidated under the name Gamestop in June 2000. B&N intended to take Gamestop public in 2001, but the dotcom bubble made that impractical. Instead, Gamestop waited until February 2002 to go public.

And here’s some fun trivia. If you remember Babbage’s, you’re old enough that you may remember VA Linux, the record-setting dotcom-era startup who sold prebuilt PCs running Linux. It turns out VA Linux changed business models after its share price crashed and became an operator of tech websites. VA Linux’s successor company merged with Gamestop in 2015.

My memories of Babbage’s

As best I can recall, I first encountered a Babbage’s store in the St. Louis area around 1987. I remember visiting locations at South County Center, at Lindbergh and Lemay Ferry roads; Crestwood Plaza, at Watson and Sappington roads; and St. Louis Center at 600 Washington Ave., which once had the distinction of being the largest urban shopping mall in the United States. South County and Crestwood were the ones I frequented.

I liked Babbage’s because they carried software for a lot of different platforms, more platforms than rival Egghead Software. I had a Commodore 128 in the late 1980s, but I liked looking at the software for other platforms too. Babbage’s refreshed its inventory more often than the larger stores like Dolgin’s and Target did. I liked how they had a good selection of both new releases and budget titles. The budget titles were near the entrance, while the pricier titles were along the wall. I’d look at the new releases, but honestly, I spent most of my money on the budget titles, mostly older releases from Accolade, Electronic Arts, Epyx, and Thunder Mountain.

Babbage’s pricing was competitive. They usually met or beat Target’s pricing while having a better selection. Mail order was cheaper but when you bought in person, you could at least see the packaging with the screenshots. After getting burned on a new release or two, I typically bought budget titles. I found that if a game survived long enough to be reissued as a budget release, it was always at least a good title. New releases that hadn’t yet stood the test of time could be a mixed bag.

I shopped at Babbage’s into the early 90s. I thought I remembered buying Amiga titles there, but their list of bestsellers from 1989 that I found doesn’t list any Amiga software. It did list IBM PC, Commodore, Apple II, Apple IIgs, and Macintosh. If they were carrying Amiga software in 1991, I’d expect them to be carrying it in 1989. I know Software Etc carried Amiga titles so I may have bought my Amiga software there. I didn’t get my first PC until 1994, and at that point I was working at Best Buy and could use my employee discount there. So I never bought any PC software at Babbage’s.

My last visit to what used to be Babbage’s

The Babbage’s I used to frequent at South County Center is a Gamestop now, and it’s just not the same. I never got a picture of it while it was operating as a Babbage’s. So I snapped a photo of it the last time I visited it as Gamestop. I don’t expect that mall to be around much longer, and I’ve learned the hard way you almost never know when you visit a store for the last time. The layout isn’t too different from how I remember, but Babbage’s had white shelves, where everything was charcoal gray at Gamestop when I visited it last. Plus it’s exclusively game console stuff now.

When it comes to 1980s and 90s mall stores that I miss, Babbage’s is pretty high on my list.

Dave Farquhar

David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.