CompUSA Closing Doors After Christmas
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.
This Spring, CompUSA received $40 million in investment income and closed over half its stores. Apparently this was the equivalent of twisting a tourniquet to stem the bleeding on a fatal wound. CompUSA based a large portion of its business on the sale of PCs and PC parts - a market that has seen its profits tank due to the prevalence of a few key online companies that have flooded the market with products at low-margin and reasonable shipping rates.
The remaining 103 stores are going to be either sold off to private companies or shut down completely following "Going out of business" sales over the Christmas season. If you are looking for a deal in your area this might be a good place to check out.
We often wonder, what causes such a large store to close? It's our belief that slashing margins was only one way for stores to compete. Combined with a strong economy and the successful positioning of consumer electronics as all but "disposable" and you got into a hairy situation that meant the lowest price won. This ultimately led to a very few volume leaders who decimated the market. It's a little scary and when the economy tightens up a bit, people may put a little more stake into a store that focuses on the long term effects of good customer support, warranty service and relationships.
CompUSA is being sold to Gordon Brothers Group LLC, a restructuring firm. Hopefully they will have some good ideas on how to take this failed giant and make an omelette out of the dropped eggs.
Source: AP via The Orlando Sentinel
Besides, who doesn't like having a few options?
admin, post: 340463That doesn't surprise me. It was never a very compelling place to shop. Poor selection, unappealing to the eye, boring shopping experience……… They had a “Hills Department Store/Montgomery Ward” feel to them.
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.
stratman, post: 341094
Hey Mr.F,
How's doin'…..If I'm not mistaken Forbes just put Mr. Slim as the world's richest man.
According to Forbes it varies between Slim and Gates on a daily basis, depending where the markets closed. Now with the CompUSA fiasco Gates might be ahead.
Perhaps based on published financial information. I'm pretty sure King Saud could buy both of them out and not feel much of a pinch. The financial media wouldn't have a clue about the king's wealth but the oil reserves of Saudi Arabia are pretty valuable aren't they? They belong to Saud and his family. Don't get hung up on what you read in the media.