CompUSA Closing Doors After Christmas

[admin]

You'd think with all the talk of hot electronics sales and a growing base of HDTV users that the larger chain stores would be flourishing and basking in the glory of increased sales and untold profits. Apparently, the CompUSA story is more akin to a large ship hemorrhaging cash and failing to compete in a sea of slashed profit margins and online sales.

Discuss "CompUSA Closing Doors After Christmas" here. Read the article.

 

[alexsound]

You'd think with all the talk of hot electronics sales and a growing base of HDTV users that the larger chain stores would be flourishing and basking in the glory of increased sales and untold profits. Apparently, the CompUSA story is more akin to a large ship hemorrhaging cash and failing to compete in a sea of slashed profit margins and online sales.

Discuss "CompUSA Closing Doors After Christmas" here. Read the article.

Not a surprise. It was only a matter of time with these guys. The 2 stores in my area are poorly organized, and poorly managed. They've always been that way.

 

[Gasman]

Yeh, saw this in the paper 2 or 3 days ago, so I only glanced at the article written here.
What I did not see in the article written here, that I saw in the paper, was that they are trying to sell the computer service department seperately.

I was thinking of hitting up my local C.USA, to see any liquidiation prices.

 

[Seth=L]

Many people believe it is the constant battering that such stores get from Wal-Mart, and obviously poor management is another suspect. In reality, it's a combination of both. After the Black Friday HDTV fiasco at Wal-Mart many other retailers where left scratching their bum. Circuit City is hurting as well, and not just because of Best Buy and Wal-Mart, once again poor management.

An example of a store that doesn't get winded after Wal-Mart does something different would be Costco, they apparently have good management and know how to react to these situations.

 

[fmw]

As a former retailer and current e-merchant I can say:

On-line sales are excellent. December is going very well on the internet and significantly better than last year. If there is a recession brewing it hasn't reached the internet yet.

The difference between Walmart and CompUSA is that Walmart built a business on profitability and tough management while CompuUSA built one on leverage. It was popular in the 80's and 90's to build retail chains on nothing but leverage. Growth for the sake growth and all that stuff. While Walmart owned their inventory, the "wonder chains" borrowed ever more heavily. A few have survived it but it wasn't easy.

Obviously it is possible to retail computers. Best Buy does it effectively. I bought a wireless network device there just this week. They had a new Apple department. I don't think that is the problem. I wouldn't view Walmart as an effective computer retailer - at least I would never go there for computer things. Walmart didn't do in CompUSA. The problem is leverage and management. They did themselves in.

 

[Warpdrv]

Compusa was always a last resort place for me... with their prices as high as they were, I could never justify shopping there on a regular basis...

its completely understandable that they couldn't compete with Internet sales...

 

[jagxtype]

keep up on if they start liquidating. Could use a new laptop

 

[Runamuck]

Problem was management. They where more worried about fudging numbers to make bonus. Huge lack of direction. When the CEO lays off a bunch of people and then pulls up in his new ferrari the next day you know something is wrong.

 

[brulaha]

Black Friday HDTV fiasco at Wal-Mart many other retailers where left scratching their bum.

What was this fiasco? Just curious, I wasn't aware that something had happened. Mislabeling of prices?

 

[Geno]

What's happing with the world?

A couple of years ago, their sister company, Good Guys, bit the dust (right after I bought my speakers), now CompUSA. Too bad.

 

[dilznoofus]

There isn't a single company in the United States that deserves it more.

Congratulations, CompUSA, you've earned this, and you will not be missed.

 

[frostbyte]

I've always liked them. They usually have the best prices at any brick store.

 

[stratman]

A quick story of CompUsa, owned by Mexican billionaire Carlos Slim's subsidiary Grupo Sanborn, he tendered an offer to acquire the outstanding $800 million shares, this move caught many by surprise since the Dallas-based CompUsa had been bleeding red ink for the previous 18 months. Though on paper it posted $6 billion in annual sales the sad reality was that the retailer was losing ground at a fast pace to Dell and Gateway and perhaps the worst sin committed by CompUsa was the inability to react to the sub-$1000.00 computer market. Mr. Slim also owns Prodigy and is the wealthiest man in South America, I believe he's listed now as the world's richest man having passed Bill Gates. Now with the loss of CompUSA that position might change.

 

[Audioholics]

The problem is that it is FAR better for everyone if there are a number of well-managed stores, rather than a handful of increasingly larger ones that dominate the market. Granted I don't see anything monopolistic going on but it's too bad these other companies couldn't figure out an angle to hold on to a share of the market.

 

[jinjuku]

I've always liked them. They usually have the best prices at any brick store.

You're joking, RIGHT? I have despised in-COMPetent USA since I set foot in their doors over 15 years ago. Pricing was alway ridiculous and staff always bottom of the barrel.

 

[fmw]

A quick story of CompUsa, owned by Mexican billionaire Carlos Slim's subsidiary Grupo Sanborn, he tendered an offer to acquire the outstanding $800 million shares, this move caught many by surprise since the Dallas-based CompUsa had been bleeding red ink for the previous 18 months. Though on paper it posted $6 billion in annual sales the sad reality was that the retailer was losing ground at a fast pace to Dell and Gateway and perhaps the worst sin committed by CompUsa was the inability to react to the sub-$1000.00 computer market. Mr. Slim also owns Prodigy and is the wealthiest man in South America, I believe he's listed now as the world's richest man having passed Bill Gates. Now with the loss of CompUSA that position might change.

Sanborn's is the largest retailer in Mexico and has been for ages. I doubt he's the richest man in the world, however. I think that title goes to the King of Saudi Arabia whose entire country, oil and all, is a family business.

 

[fmw]

The problem is that it is FAR better for everyone if there are a number of well-managed stores, rather than a handful of increasingly larger ones that dominate the market. Granted I don't see anything monopolistic going on but it's too bad these other companies couldn't figure out an angle to hold on to a share of the market.

That is something I've always hated. I tend to like to do business at small locally owned retailers or smaller regional chains. Most people, however, prefer super stores so that's mostly what we have. I tried to build a local retail business a few years ago and I couldn't do it. It was a gourmet kitchenware store. I had a broader product assortment than any of the chains and even lower prices. But I was too much of a specialist for the local marketplaced. What I had would have worked just fine as a department in a super store but it couldn't exist by itself. I shut it down after just three years. Now I do my retailing on the internet exclusively. Times change.

 

[jinjuku]

That is something I've always hated. I tend to like to do business at small locally owned retailers or smaller regional chains. Most people, however, prefer super stores so that's mostly what we have. I tried to build a local retail business a few years ago and I couldn't do it. It was a gourmet kitchenware store. I had a broader product assortment than any of the chains and even lower prices. But I was too much of a specialist for the local marketplaced. What I had would have worked just fine as a department in a super store but it couldn't exist by itself. I shut it down after just three years. Now I do my retailing on the internet exclusively. Times change.

One thing I have found:

The average person is PRICE oriented, not VALUE oriented. It is cheaper in their eyes to purchase a $30 set of sneakers five times over than to purchase a $60 set twice over the same period.

I think it is even worse because people directly correlate price with value. Most here purchase based on value. Price will come into the equation when comparing two things of the same intrinsic value.

 

[fmw]

One thing I have found:

The average person is PRICE oriented, not VALUE oriented. It is cheaper in their eyes to purchase a $30 set of sneakers five times over than to purchase a $60 set twice over the same period.

I think it is even worse because people directly correlate price with value. Most here purchase based on value. Price will come into the equation when comparing two things of the same intrinsic value.

I don't think it is that simple with regard to retailing. People stood in line to pay more at the super stores than my prices for the same product in my retail store. Many people have a comfort level with large companies. I'm not sure why because large ones are just as capable of failing as small ones and most of them have a higher selling cost ratio (payroll to sales ratio) and need more margin.

I often have people call my on line business to tell me some other web site has some product for $2 less than my website and they wonder if I'll reduce my price. I ask them why they didn't buy it at the other site. They usually say they've heard of mine and it has been around a long time and we actually answer the telephone. I tell them I think that's worth more than $2. They almost always agree and place an order. The stubborn ones that don't are usually a good riddance.

So to say that price is the primary driving force is simplistic. It certainly is an important factor in anybody's decision-making and will almost always tip the scales when other things are equal. But other things aren't always equal.

 

[tomes]

I don't recall ever getting a good deal at CompUsa, other than when one of their stores closed and I got Vista for a great deal. I went there once in a while, but never found good deals, and when I was desperate would be the only times I would go (They did have larger selection than some other stores on computer equipment). That usually was a fiasco too, since the products listed on their website (at a good price), was nowhere to be found in the store. I remember needing memory for a pc and going there, since they had a good deal on 512 mb chip (30 dollars at the time). When I get there, they didn't have it, and I had to buy a no-name one for 50 from them. (I was desperate to get my pc working...)