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Massive losses and stiff competition lead to a battered and broken CompUSA

Rumors of CompUSA's demise have been running around the Internet for the past couple of days, but official confirmation has finally come down from the top. The company announced yesterday that it was acquired by an investment firm and that all of the company's businesses and assets would be sold.

Under the terms of the deal, ownership of CompUSA will be transferred from Mexican billionaire Carlos Slim to the Gordon Brothers Group. "An orderly and expedited wind-down and asset sale process is the best option for CompUSA and its creditors at this juncture," said Bill Weinstein of the Gordon Brothers Group.

"We worked long and hard with Gordon Brothers Group to achieve a business solution that maximizes CompUSA's assets," said CompUSA CEO Roman Ross.

According to Bloomberg, the Dallas-based company has courted Circuit City, Micro Electronics and Systemax to purchase closing retail locations and acquire business operations including CompUSA TechPro, CompUSA.com and CompUSA’s technical services division.

CompUSA lost $45.7 million USD during Q3 2007 on revenues $424 million USD. The company has not been able to battle losses despite cash infusions of $2 billion USD and $440 million USD in 1999 and early 2007 respectively.

Those looking to take advantage of reduced prices on tech gifts for friends and family many want to head down to your local CompUSA -- if you still have one left. The company's remaining 103 stores will remain open through the holiday season and will provide steep discounts on all remaining products.

CompUSA, under the direction of Carlos Slim, took drastic steps to turn around its business. The company closed 126 underperforming stores nationwide in February. "Based on changing conditions in the consumer retail electronics market, the company identified the need to close and sell stores with low performance or non-strategic, old store layouts and locations faced with market saturation," said Ross in late February.

Increasing competition from electronics giant Best Buy, a reinvigorated Circuit City and retail monster Wal-Mart left little room for error during CompUSA's restructuring phase.

CompUSA has taken numerous hits over the years for its business practices and its service. The company has also been nicknamed by many techies as CompUSSR for its sometimes “shady” business practices. Most recently, the company came under fire for its mail-in rebate promotions. The Federal Trade Commission (FTC) stepped in and a more streamlined, paper-less Internet-based system was introduced to aid consumers.

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I like Microcenter better
By shaw on 12/8/2007 3:46:36 PM , Rating: 3
Once I found out about the Microcenter in my area I pretty stopped going to Comp USA and Best Buy for anythnig remotely PC related. Microcenter is a bigger computer centered store with better inventory of everything PC related. I usually shop there since the prices are mines in Pennsylvannia are pretty reasonable on most items.




RE: I like Microcenter better
By Brandon Hill (blog) on 12/8/2007 4:07:49 PM , Rating: 2
Around here, all we have is Circuit City and Best Buy. The CompUSA in Raleigh closed down earlier this year.

Still, I never buy computer equipment from either BB or CC -- I can always find the item cheaper online at Newegg, Frys.com or its ilk. And most of the time, I can have the item within 2 days if ordering from those two companies.

Sometimes I wish that we had a Frys here in NC, but other times I'm glad that I can order from Frys.com, get it within 2 days and not have to pay sales tax :P


RE: I like Microcenter better
By theapparition on 12/8/2007 4:43:09 PM , Rating: 5
What I'm sure you meant to say was that you didn't mind waiting the 2 days and deferring the sales tax until income tax time, where you can then pay your state's sales tax.

Don't want to admit to doing anything illegal ;)


RE: I like Microcenter better
By Brandon Hill (blog) on 12/8/2007 5:01:29 PM , Rating: 2
Yeah, yeah. It must have slipped my mind... yeah, that's it :)


RE: I like Microcenter better
By sprockkets on 12/8/2007 5:09:05 PM , Rating: 2
Or live in florida and have no state income tax period. Makes up for somethings that suck here.


RE: I like Microcenter better
By Brandon Hill (blog) on 12/8/2007 5:34:10 PM , Rating: 5
Like old people driving Mercury Grand Marquis' slow in the fast lane with their left blinker on?


RE: I like Microcenter better
By Ringold on 12/8/2007 8:52:44 PM , Rating: 2
Tends to be idiots between the age of 15 and their late 20s that get themselves smashed on the interstate that make driving around a pain.

I'm not sure, but I hear thats a problem demographic everywhere :)

The oldest stick to their nursing homes, which often provide bus service to the local places theyd want to go.. thank god..


RE: I like Microcenter better
By theapparition on 12/10/2007 11:05:43 AM , Rating: 3
As someone who grew up in Florida, I can certainly attest to the fact that it is the most unpredictable place to drive that I have seen in the US. At least in the Northeast and California everyone drives like an idiot, and everyone in the south drives like they have a thumb up their rump, but at least they are consistant.

In Florida, there are a mix of old people driving slow, making poor driving decisions, young people trying to speed everywhere, and the ever increasing soccer minivans, who I no idea what their doing, and not sure they do either.

On US1 along the east coast, there are areas where going north, there are basically no traffic lights in the right lanes, and the roads that intersect from the left (there are no right intersections, its a river) are allowed to turn into the lane, but must stay in the left lane. More than once, I had someone cross right over the bump strips and turn right in front of me going 60mph. Each time it took almost every bit of driving knowledge to stay out of an accident.


RE: I like Microcenter better
By Oregonian2 on 12/10/2007 4:43:00 PM , Rating: 2
Yup, no sales tax here in Oregon either. And we've a local Fry's.


RE: I like Microcenter better
By timmiser on 12/12/2007 5:21:20 PM , Rating: 2
The best place to live is in Vancouver, WA accross the river from Portland. No state income tax in Washington where your residence is and do all your shopping accross the river in Oregon for no sales tax!

If you do a lot of internet purchasing, get a mailbox in Portland so you can show your shipping address in Oregon and not have to pay any sales tax for any of your online orders.


RE: I like Microcenter better
By theapparition on 12/10/2007 11:07:13 AM , Rating: 2
It's slipped my mind a few times too. ;)


RE: I like Microcenter better
By Samus on 12/8/2007 11:39:20 PM , Rating: 2
I miss our CompUSA...I liked it more than MicroCenter, mostly for its clearance items.

However, I'm always happier going to Fry's, although half the time they don't have what I want in stock :(


RE: I like Microcenter better
By maverick85wd on 12/9/2007 7:19:30 AM , Rating: 2
there's a giant tiger direct store in Raleigh as well, I used to buy stuff there all the time.


RE: I like Microcenter better
By jon1003 on 12/8/2007 4:15:30 PM , Rating: 2
Microcenter is the closest thing to a Brick and Mortar NewEgg that exists. What store sells Tuniq 120's? Asus top end mobo's and aisles of other mobos? A wall of fans and heat spreaders? Watercooling parts? There's no other B&M like that that I can think of. It's the only place you can actually see this stuff in person. If you've never seen an enthusiast HSF in person, you wouldn't believe how big it is. They actually have decent sales sometimes. They don't have any competitors besides the online stores for a lot of their goods, and the people working the technical departments actually know what a FSB multiplier is.


RE: I like Microcenter better
By Brandon Hill (blog) on 12/8/2007 4:16:43 PM , Rating: 6
quote:
What store sells Tuniq 120's? Asus top end mobo's and aisles of other mobos? A wall of fans and heat spreaders? Watercooling parts? There's no other B&M like that that I can think of.


Frys?


RE: I like Microcenter better
By darkpaw on 12/9/2007 10:35:38 AM , Rating: 2
I really miss Fry's since moving back East. Microcenter is really a tiny imitation. I wish they'd really expand some more, they'd make a killing in the Northern Virginia area.


RE: I like Microcenter better
By timmiser on 12/12/2007 5:24:17 PM , Rating: 2
You gave yourself a 6 for that??


RE: I like Microcenter better
By kmmatney on 12/9/2007 12:44:35 AM , Rating: 3
Microcenter does have a great selection of Heatsinks, and generally good deals on motherboard combos. I lived in Redondo Beach, CA for a few years, minutes away from Fry's, but I don't miss it much, due to Microcenter.


RE: I like Microcenter better
By das mod on 12/10/2007 1:38:57 PM , Rating: 2
i have been lately comparing prices between new egg and microcenter, and specially on CPUs, they're running about the same ... except there's no "shipping fee" if purchased on microcenter ....
i hate fry's because their online prices and in-store prices are always different


RE: I like Microcenter better
By Oregonian2 on 12/10/2007 4:51:18 PM , Rating: 2
quote:
i hate fry's because their online prices and in-store prices are always different


Maybe mostly different, but not "always". The local store has been selling the 750GB WD SATA drive on sale for $179 off and on for the last couple months or so. Their online has had it for the same price off and on, sometimes w/free shipping other times with about $5 shipping. I've bought them both ways from frys.com as well as a couple from the store at the same price (no sales tax here, but gas for driving there and back is roughly what shipping from Frys.com in Ohio is).

P.S. - Nowdays, when the computer gets a new drive, backup server gets one of the same size too (although a couple of those were bought for replacement purposes of multiple smaller drives). :-)