bajaguy
Elite Nomad
Posts: 9247
Registered: 9-16-2003
Location: Carson City, NV/Ensenada - Baja Country Club
Member Is Offline
Mood: must be 5 O'clock somewhere in Baja
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Carlos unloads CompUSA
CompUSA to close all stores
Mexican billionaire Carlos Slim will shutter the last 100 CompUSA stores and exit the U.S. consumer-electronics market after a round of holiday
discounts to get rid of inventory.
Mexican telephone and retail magnate Carlos Slim, in a rare defeat, will exit the U.S. consumer-electronics market, shutting the last 100 CompUSA
stores after sinking about $2 billion into the business.
Stores will remain open through the end of the year under the supervision of Gordon Bros., a retail-store liquidator, which will also oversee a
piecemeal sale of CompUSA, negotiating the sale of real estate and other assets. Two law firms were hired to represent creditors, CompUSA said.
"An orderly and expedited wind-down and asset sale process is the best option for CompUSA and its creditors," Bill Weinstein, a principal at Gordon
Bros., said in a statement. Weinstein was named interim president of the firm.
CompUSA has not been recently profitable, industry executives said. The company did an estimated $4 billion in annual sales last year, but with the
closure of more than half of its stores in February, sales were expected to shrink to about $1.5 billion this year.
Slim, the powerful chairman of Telefonos de Mexico (TMX, news, msgs) and operator of a string of retail businesses in Latin America, has long coveted
a big name in the U.S. retail market. He took his first stake in the business in 1999 and expanded the business through acquisition. After taking a
minority stake in the retailer, he later spent $800 million to take the company private.
In 2003, CompUSA acquired California consumer-electronics chain The Good Guys. In 1998, he purchased Computer City from Tandy.
The retailer has struggled for years, hurt first by competition from direct personal-computer sellers such as Dell Inc. (DELL, news, msgs) and more
recently by intense competition in consumer electronics. Bigger rivals such as Best Buy (BBY, news, msgs) and Wal-Mart Stores (WMT, news, msgs) have
been able to offer greater selection and lower prices for flat-panel televisions and other consumer-electronics gear.
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Barry A.
Select Nomad
Posts: 10007
Registered: 11-30-2003
Location: Redding, Northern CA
Member Is Offline
Mood: optimistic
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Sometimes you win, sometimes you lose. A rare event for Slim.
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bajadock
Super Nomad
Posts: 1219
Registered: 12-20-2006
Location: Punta sur de \'Nada
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CompUSA biz model wasn't good. I always wonder how Circuit City and Best Buy make a profit. How many extended warranties must they need to sell
daily???
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