Thread: Mexican Retailer CompUSA closing over half of its stores

CompUSA closing over half of its stores

2/28/2007 9:39:34 AM, by Eric Bangeman

CompUSA today announced plans to close 126 stores in the United States, leaving the computer retailer with 103 stores spread across 39 states and Puerto Rico. The process began last week with the closing of four stores and the rest will be shuttered in between 60 and 90 days.

The store closings come as part of CompUSA's retrenchment strategy, and the company will be getting a massive cash infusion to the tune of $440 million once the closings have been completed. "Based on changing conditions in the consumer retail electronics market, the company identified the need to close and sell stores with low performance or nonstrategic, old store layouts, and locations faced with market saturation," said CompUSA CEO Roman Ross.

CompUSA has been around for a long time and as recently as 1999 was the number three electronics retailer in the US, trailing only Best Buy and Circuit City (which is also in the process of shuttering stores). 1999 also saw the purchase of the chain by Mexican retail management company Grupo Sanborns, which took the company private.

As Ross noted, the chain has faced stiff challenges in the consumer electronics market over the past several years. System builders, enthusiasts, and others in the know have long since migrated to NewEgg, M-Wave, Tiger Direct, and other well-known and less-expensive online retailers. In addition, big box retailers like Best Buy have taken an increasingly large chunk of the PC and peripherals market while Fry's has grabbed massive amounts of mindshare—if not market share—in the markets it has entered. Even Target and Wal-Mart are diverting shoppers away from CompUSA.

CompUSA has responded by remodeling stores and carrying big-ticket consumer electronics items like flat-panel televisions. Once upon a time, the chain was also responsible for the majority of Apple's retail presence after launching the Apple "store-within-a-store" sections often staffed by specially trained CompUSA employees. Since Apple began opening its own retail stores—now at 171 and counting—CompUSA is no longer a destination of choice for those shopping for Macs and iPods.

One of the first four stores to close is in the Chicago suburb of Skokie, less than three miles from my house. To give you an idea of what the local competition looks like, the store is in the same shopping center as a Best Buy and a GameStop, and there's a Circuit City, Target, and Wal-Mart less than a half-mile down the street. I stopped by on Saturday and found that the store closing was already in full swing. The story was buzzing with shoppers looking for bargains, and prices on most items were marked down 20 to 40 percent. I cast a quick glance over at the Apple department in hopes of scoring some bargain hardware and saw that the entire section had been stripped down to the shelves, with the merchandise likely returned to Apple or sent to other locations. The best bargains appeared to be in the video game aisles, with prices of Xbox 360 and PlayStation 2 titles and peripherals slashed. Peripherals such as printers had already been picked over fairly well, and I suspect that by the end of the week, shoppers will have little to choose from other than dusty ATI Rage Pro video cards and parallel port cables.

I had been an infrequent customer of CompUSA—not-so-affectionately known by some of its customers as CompUSSR—over the years. I prefer to buy my hardware online, or make a 30-minute pilgrimage to Fry's when it offers something like a $169 500GB hard drive. As I suspect is the case for many others like me, CompUSA has become the store of last resort, the place you go when you need a new router RIGHT NOW. That's not a good niche, especially when consumers are fickle and the competition is cutthroat.

http://arstechnica.com/news.ars/post/20070228-8940.html

Hmmm... I didn't know that they had been taken over by a Mexican firm. I hope the whole chain goes belly up.

The last time I went in one, it was dark, disorganized, and the prices for many items were above list.

It was also empty of customers.

I see that all of the CompUSA stores in Southern California have closed, with the exception of the one in Goleta.

I stopped shopping there because their employees did not seem to know the products and because there was a tendency to never have in stock the items that appeared in sales flyers.