CompUSA

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CompUSA
Type Subsidiary of Systemax
Founded 1984 (Addison, Texas)
Headquarters Miami, Florida
Industry Retail
Products Electronics
Website www.CompUSA.com

CompUSA is a retailer and reseller of consumer electronics, technology products and computer services. CompUSA serves consumer retail, small-to-medium businesses, corporate, government, and education customers. Founded in 1984 as Soft Warehouse in Addison, Texas, a northern suburb of Dallas, by Errol Jacobson and Michael Henochowicz,[1] the company began national expansion in 1985 with its first megastore opening in Atlanta, Georgia. Jacobson and Henochowicz led a team of young managers including Elizabeth Greenwood and Pat Wyckoff who were skilled in retail, distribution, logistics, service and merchandising. The team of four successfully launched megastores in Atlanta, Dallas, Los Angeles, Denver, Houston, and Miami.

In 1991, under the direction of Chief Executive Officer Nathan P. Morton, the company's name was changed to CompUSA, and the company became publicly traded on the New York Stock Exchange. While under Morton's leadership, CompUSA grew to over $2 billion in revenues. Morton resigned in 1993 after a falling out with the board of directors.

Currently based in Miami, Florida, CompUSA currently operates 17 retail stores in Florida, Texas, and Puerto Rico. Eleven former Tiger Direct locations and two locations under construction will be brought under the CompUSA banner in the summer of 2008 for a total of 30 stores.

Until its reorganization, CompUSA, Inc. was a wholly-owned subsidiary of U.S. Commercial Corp S.A.B. de C.V.[2] and indirectly controlled by a common shareholder, Carlos Slim. On December 7, 2007, an affiliate of liquidation firm Gordon Brothers Group bought the company. Systemax purchased the CompUSA brand, 16 retail locations and other company assets were purchased in January, 2008.

Systemax also operates CompUSA.com, a retail web site that offers an assortment of products, as well as a dedicated catalog site for businesses.

Contents

[edit] History

A typical CompUSA store, circa 2005 (closed in 2006)
A typical CompUSA store, circa 2005 (closed in 2006)
  • 1984 - Founded as Software Warehouse in Addison, Texas, selling direct to business customers.
  • 1985 - Opened first retail store.
  • 1986 - Opened first megastore Atlanta, Georgia.
  • 1987 - Converted Texas shop to megastore.
  • 1988 - Opened first Southern California stores.
  • 1988 - Opened first Computer Superstore.
  • 1991 - Changed name to CompUSA.
  • 1993 - Began offering technical services at customer locations.
  • 1996 - Launched retail sales on CompUSA.com.
  • 1998 - Acquired Tandy's Computer City subsidiary with the help of former CEO Nathan P. Morton.
  • 1998 - In May, the company invested in facilities, technology, and expertise to form CompUSA Call Center Services, a division that provided contact center services to OEM, corporate help desks, software publishers, and cellular service providers.
  • 2000 - Became privately held company under Mexican retail company, Grupo Sanborns.
  • 2001 - In July, CompUSA Call Center Services became The Telvista Company.[3]
  • 2003 - Acquired Good Guys.[4]
  • 2005 - Converted three CompUSA stores and 13 Good Guys stores into megastores. Closed all 46 Good Guys locations. Began marketing in California and Hawaii as "CompUSA with Good Guys Inside" in response to Best Buy's marketing campaign "with Magnolia Inside".
  • 2006 - Announced the closing of 15 stores across the United States including several locations in California. These stores were being used to liquidate discontinued items from other stores across the nation until the end of October. Roman Ross, a former Phillip Morris executive, replaced Tony Weiss as president and CEO after only four months in office. In November 2006, CompUSA launched their new "Home Entertainment" rollout in 40 of its stores, including Puerto Rico, that sold a variety of high definition televisions and home theater equipment. Ross claimed that home entertainment was one of his chief focuses as the new CEO.[5] In September, it was reported that CompUSA's Mexican parent, Grupo Carso, was interested in putting CompUSA up for sale.[6]
  • 2007 - The company announced the closing and liquidation of 126 stores due to the "need to close and sell stores with low performance or non strategic, old store layouts and locations faced with market saturation," according to CEO Roman Ross.[7] The realignment included a $440,000,000 cash infusion, store closures, major expense reductions, and a corporate restructuring.
  • 2007 - On May 14, CompUSA finalizes the first round of store closures as liquidation sales end.
  • 2007 - On December 7, CompUSA was acquired by Specialty Equity, an affiliate of Gordon Brothers Group, as discussions led to the agreement on store sales and closeouts for the remaining 103 stores.[8]
  • 2008 - On January 6, Systemax Inc. announced an agreement on the acquisition of the CompUSA brand, trademarks, e-commerce business, and as many as 16 CompUSA retail outlets in Florida, Texas, and Puerto Rico. [9]
  • 2008 - On March 2, CompUSA finalizes the round of store closures that started on Dec 7. AT&T Consumer Home Services agrees in principle to purchase the TechPro group for an unstated amount.
  • 2008 - On March 21, CompUSA announces that 12 CompUSA stores are open to the public.[10]

[edit] The CompUSA Network

In 2005, CompUSA started a customer loyalty program called The CompUSA Network. For every dollar spent at any CompUSA store, the customer received 13 points. Rewards included an Epson photo printer and a Canon Digital Rebel SLR digital camera. However, in June 2006, sales of the CompUSA Network membership cards were suspended pending further investigation onto the operation's effect on customer retention and "program awareness among low-visit customers."

On August 24, 2006, CompUSA announced the end of the Network Reward program. All customers were notified of this and issued coupons for the remaining reward value, as well as their original purchase price. They were also offered a refund of the original purchase price in the original form of payment, however this option removed any remaining reward points.

[edit] Controversies

[edit] Product rebate offers

On March 11, 2005, the Federal Trade Commission settled charges against CompUSA on the issue of rebate problems. The FTC alleged that CompUSA engaged in deceptive and unfair practices relating to rebate offers made for both its own branded products and QPS products. CompUSA paid no additional fine and only had to pay out any cash rebates that it owed, unless it had substantiation for errorenous rebate claim.[11]

[edit] CompUSA-owned brands

[edit] Slogans

Many of the stores still bore the slogan, "The Computer Superstore" at the time of closing. Most of the new Systemax stores also bear this slogan.

  • "The Computer Superstore." (1997 - May 2003)
  • "Where America Buys Technology." (May 2003 - July 2005)
  • "We got it. We get it." (July 2005 - 2006)

[edit] Puerto Rico slogans

  • "Where Puerto Rico Buys Technology." (May 2003 - July 2005)
  • "Lo Tenemos. Lo Entendemos." (Translation: "We have it. We understand it," essentially a Spanish translation of the current English slogan.) (July 2005 - 2006)

[edit] Closings

Typical CompUSA store under liquidation
Typical CompUSA store under liquidation

On or immediately before February 28, 2007, CompUSA retained the services of Gordon Brothers, a company that specializes in liquidation, for the purposes of closing 126 stores nationwide. [12] The closing locations were chosen based upon their overall performance, profitability, and proximity to more successful competitors such as Best Buy, Fry's and Circuit City. This first round of closings reduced the number of stores to less than half of its previous number.

During the liquidation process, the stores typically offered discounts starting at 5 to 30 percent off of retail prices, ending at up to 95 percent. The liquidation process was completed on May 14, 2007. The stores were completely shuttered by the following Friday.

On December 7, 2007, CompUSA was sold to Specialty Equity, an affiliate of Gordon Brothers Group. Gordon Brothers closed the remaining 103 CompUSA stores (including all 3 in Puerto Rico). It sold the company's online and technical services, CompUSA.com and CompUSA TechPro, as well as certain stores in the Florida, Texas, and Puerto Rico markets to Systemax a month later. [13]

[edit] Systemax purchase

On January 6, 2008, a month after CompUSA was sold to liquidators, Systemax (TigerDirect's parent company) announced their purchase of 16 CompUSA locations as well as the brand, trademarks, and e-commerce business.

TigerDirect also announced that the 11 existing and 3 TigerDirect-branded retail stores under construction will be converted to the CompUSA brand over the spring of 2008, resulting in a total of 30 CompUSA stores by the beginning of summer.

CompUSA's TechPro service department will also be re-opened at the stores and introduced into the former TigerDirect stores. [14]

[edit] References

  1. ^ Halkias, Maria. CompUSA couldn't overcome obsolete practices. The Dallas Morning News. 2008-02-05.
  2. ^ Wright Reports Company Profile - US Commercial Corp SAB De CV. wrightreports.ecnext.com. Retrieved on 2007-12-28.
  3. ^ Telvista's History. www.telvista.com. Retrieved on 2008-01-20.
  4. ^ CompUSA To Buy Good Guys. About.com. 2003-09-29.
  5. ^ CompUSA Names New CEO. Yahoo! Finance. 2006-09-01.
  6. ^ CompUSA seeking buyer, paper says. CNN Money. 2006-09-13.
  7. ^ CompUSA (2007-02-27). "CompUSA Announces Realignment Strategy". Press release.
  8. ^ CompUSA Store Closings. C-Net. Retrieved 2007-12-14.
  9. ^ "Systemax Announces Definitive Agreement to Acquire Selected Assets and Retail Stores From CompUSA", RedOrbit.com. Retrieved on 2008-01-06. 
  10. ^ CompUSA. "CompUSA News: 12 Stores Already Open". Press release. Retrieved on 2008-03-23.
  11. ^ The Rebate Debate: Why Were They Late? FTC Settles Charges Against CompUSA. Federal Trade Commission. 2005-03-11.
  12. ^ Closing Stores. CompUSA. Retrieved on 2007-12-26.
  13. ^ "CompUSA sold to Boston-based firm", Honolulu Star Bulletin, 8 December 2007. Retrieved on 2007-12-14. 
  14. ^ "Plano CompUSA store to re-open", Dallas News, 12 February 2008. Retrieved on 2008-02-27. 

[edit] External links

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