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 Technology News | December 2007 
CompUSA to Shut Shop After Holidays
 Jyoti Pal - The Money Times
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Bogged down by intense competition, CompUSA, the computer retailer will shut shop soon after the U.S. holidays. The retailer, owned by the Mexican billionaire Carlos Slim, has been acquired by the restructuring firm Gordon Brothers Group, which intends to close or sell its 103 stores. Financial terms of the acquisition were not disclosed.
Bill Weinstein, principal at Gordon Brothers, who will also serve as interim president of CompUSA said, "An orderly and expedited wind-down and asset sale process is the best option for CompUSA and its creditors at this juncture."
CompUSA, Inc was founded by Mike Henochowicz and Errol Jacobson as a Soft Warehouse in 1984. The company is based in Addison, Texas (a northern suburb of Dallas) and is a retailer and reseller of consumer electronics, technology products and computer services. CompUSA currently operates 103 stores in markets across the United States and Puerto Rico.
The besieged retailer has struggled for nearly a decade with declining prices of personal computers and cut throat competition from retailers such as Best Buy Co. and Wal-Mart Stores Inc.
Honolulu retail analyst Stephany Sofos said, "Competition was getting thicker and thicker.When you sell your best stores, then you can rebuild your business plan and then maybe go back to your core business without the overhead."
CompUSA is indirectly controlled by a common shareholder, Carlos Slim, the Mexican billionaire who bought it in the year 2000. Slim bought his first stake in the company in 1999 and took it private the next year in an $800 million buyout. Slim has, over these eight years, invested one and a half billion U.S. dollars to turnaround the company, but in vain.
Slim had earlier hired Credit Suisse Group to put CompUSA up for sale. He admitted at a news conference in Mexico City in March, "We made a mistake with management." |
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