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R.I.P. CompUSA

December 10, 2007 | Author: Ibex Marketing

Have I mentioned lately just how tough the consumer electronics retail market is these days? The latest casualty — but certainly not the last — is CompUSA. About half of the chain’s stores closed last spring, but apparently that was not enough to staunch the flow of red ink. The remaining stores have been turned over to the Gordon Brothers Group, which specializes in liquidating retail stores. (This is the same company that handled CompUSA’s closings last spring.)

This is significant news on two counts. First, this means that you may be able to find some bargains at the remaining stores between now and the end of the year. Gordon Brothers reportedly raised some prices initially before slashing them to liquidate the inventory of the stores sold off last spring. You might want to watch for a repeat of this pattern, but be prepared to move quickly once your price has been met. The other point is a larger one; in the short term, the sell-off of these stores may cause a small dip in overall prices, but it’s not likely to have much impact on the market either way in the long term. Best Buy and Wal-Mart and Costco remain giants in this market, and I suspect that they are not too concerned with smaller competitors. CompUSA made an aggressive play for HDTV business, turning over large portions of their floor space to flat panel displays, but this was not a winning strategy. We’ve also seen Radio Shack pull back apparently from their emphasis on HDTV. It will become increasingly difficult for the smaller chains to compete for HDTV sales. So the take-away here is that you can expect to see further consolidation of the HDTV retailers over the next year or two.