Nine years ago, CompUSA opened a store in Tallahassee, Fla. I remember my friends and colleagues talking about the grand opening as if the town had just made it into the big retail leagues.
Fast-forward to today, and the story has taken a very different turn. In 2000, the company was sold to Mexican superinvestor Carlos Slim and his Grupo Sanborns S.A. de C.V., hoping to turn around the limping retailer. But the competition proved too strong even for Slim, turnaround master though he may be, and news that the stores would close arrived over the weekend.
The company is working with Gordon Brothers Group to help sell its stores, technical service business, and online business. While a few stores may survive, the vast majority will sell off whatever inventory they can, then close their doors for good.
Back in the nineties, you could go down to your local CompUSA, pick up a few parts, and build your own computer for less than you'd spend on a comparable Dell (NYSE: DELL) or Gateway 2000. Now, you'd be hard-pressed to price-match a Dell or Hewlett-Packard (NYSE: HPQ), even if you went looking for bargain-basement parts online. Newegg.com is great, but only for fix-it replacement parts these days. Same goes for eBay's (Nasdaq: EBAY) geekier categories. Besides, everybody wants a laptop, and those are tough to build without an assembly line of your own.
As for the less hardcore-nerd needs, CompUSA couldn't compete with the scale and pricing power of Best Buy (NYSE: BBY), not to mention latecomers Wal-Mart (NYSE: WMT) and Target (NYSE: TGT). Big-box retailers don't have the wide selection of computer parts that CompUSA did, but they've got the basics at reasonable prices.
On top of the competitive pressures, CompUSA was infamous for its cold-hearted corporate culture. That led to disloyal employees, high turnover, and an unfriendly in-store environment. I don't know anyone who'll cry hard over the departure of the so-called "CompUSSR," except for the current employees. And perhaps not even them.
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