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CompUSA Closing More Than 50 Percent of Stores
Zurbrick writes to tell us that CompUSA hs announced that they are closing the doors on over half their stores over the next three months. "CompUSA said in a statement it would close 126 of its stores and would receive a $440 million cash capital infusion, but it was not specific as to the source of the cash. The company also said it would cut costs and restructure. The company operates 225 stores, which its Web site says are located in the United States and Puerto Rico. "
Disclosure: I worked for CompUSA about 18 years ago during a court-mandated stint forcing me to have a "real" job. It was a 6 month stint at which time I was the top performing sales person month after month, even though I was only 16. I learned a lot of corporate retail problems, which continue to this day.
I have 2 CompUSAs in my area, close to clients that my company still maintains. They're both depressing -- too many workers, but no one with knowledge. I hear a lot of lies, get pushed on extended warranties that don't work, and have to deal with waiting and waiting when I need to find something that their website shows as in-stock. The company is inept because the company is trying to compete in the wrong market.
I honestly see a lot of retail collapsing because the time is getting close that the manufacturers can sell products cheaper, and at a higher profit for themselves, directly or through direct-partners. I can't imagine a Luddite like my father trying to buy something at CompUSA when the typical sales person there is no different than Best Buy's brilliant teen workers. But that's the end problem: CompUSA is still trying to be a consumer store rather than business-oriented.
CompUSA has a much wider inventory than Best Buy or Circuit City, but they obviously can't compete with those power houses who have more stores and also have a lot of value-added items they can sell to make up for what they don't make on popular laptops and LCD monitors. Yet the typical business that I deal with still prefers solid advice over bottom-line price. Consumers want it cheap, and they tend not to have long-term relationships with a particular sales person or a store. CompUSA dropped the ball when they started to lose to CDW and MacWarehouse -- the corporate clients of mine haven't used CompUSA in years because of their change from business-focused to consumer-oriented and cheap.
Even on price CompUSA doesn't compete -- often times when I need something I am shocked at the prices. Sure, we're all familiar with the $6-USB-cable-that-sells-for-$39, but even basics such as a stand IEC power cord are overpriced. Their selection is decent, but they are trying to compete in a market that they can not penetrate, especially with Amazon and eBay destroying the price competitiveness of the big box PC store.
This is a good thing for CompUSA, but I don't see them lasting. Every CompUSA near me has both Best Buy and Circuit City nearby, and I admit that I've had more intelligent sales staff at the big box store than at CompUSA. If they want to save their business, they have to focus on local businesses rather than trying to be the answer man for people who want cheap prices and sales. Without the business customer (who tends to accept a higher cost in exchange for GOOD advice and support), their business is heading to the toilet.
Here in the UK, there is 1 (yes one) company which pretty much has a stranglehold on about 90% of the bricks & mortar large computer stores. While smaller ones exist, I'm only talking about the large places with a reasonable selection that tend to be located in out of town industrial areas, since that's the fairest comparison with CompUSA and BestBuy.
It's the closest thing we have to Best Buy or CompUSA.
It's called PC World, and it's run by a company called the Dixons Stores Group.
Let's just say: £80 network cards (that was apparently the cheapest), £20 USB cables (again, the cheapest), £1,200 PCs. They stock cheaper ones but I've never met anyone who ever bought one - I suspect those who are savvy enough don't go there in the first place, and those who aren't are generally told "You want to send email? Well, in that case you'll need this...". And extended warranties which cost 70% of the value of the PC, yet are serviced by spotty 16 year olds who wouldn't know a PC if it dropped on their head.
Last I heard from the management, only four of the stores were closing down so far, the rest was up in the air. That could just be a calm-the-sheep lie though, so I'm not arguing. I do know that the last six or seven American execs just got canned and replaced with imports (money from Mexico, execs from Mexico), and that they're doing a level-by-level layoff scan. With any luck this might be a good thing though; my store is one of the better performing ones, with a few actually honest people. I'm one of the repair techs, and an honest one at that; they don't pay me enough to lie for them, and I've told the managers that. My little badge of honor is that no customer has ever asked me about Vista and then went on to purchase it. The stores are desperately understaffed though, so maybe we'll actually get some funds to fill out the staff (right now if anyone in the tech department calls out, a manager has to take his place, and the sales floor isn't doing much better). On the other hand, if my store was one of the closers, that'd be okay too.
It started out as a small western chain, but it grew.
If I have been able to see further than others, it is because I bought a pair of binoculars.