CompUSA May Be On The Block
By Alan Wolf -- TWICE, 9/25/2006
DALLAS — CompUSA could be on the auction block.
According to a published report, the chain is being shopped around to private investors by financial services firm Credit Suisse at the behest of CompUSA's corporate parent Grupo Carso.
CompUSA would not comment on the report, which cited unnamed industry sources. A spokesperson for the retailer said it hopes to issue a statement soon.
In an interview with TWICE, newly named CEO Roman Ross would not rule out the possibility of an acquisition or merger. “Everything's always on the table,” he said, although his immediate focus would be on the company's fundamentals and finding the right mix of products and services.
Ross, who had been on the job for four days, said the company is “very healthy,” is posting “great numbers,” and that major suppliers have been “very positive” about the change at the top.
The Philip Morris veteran said he would stay the course laid out by his predecessors Tony Weiss and Larry Mondry, who moved the PC chain into home entertainment and targeted both consumers and small businesses with an array of IT and home installation services.
“I don't see any major visionary changes,” Ross said, “and I will continue to build on the foundation created by Larry and Tony.”
Mondry left CompUSA in May and was succeeded by Weiss, who had worked his way up the company ranks from an hourly wage position. Weiss told TWICE that after 18 years at the company, and four-and-a-half months at the helm, he is leaving CompUSA “in a good position” in order to relax and spend time with his family. “The company is well-positioned for a strong fourth quarter,” he said. “My work here is done.”
Ross was touted by CompUSA for having a “proven track record of developing and implementing strategies that improve business results.” He said his background with Philip Morris has given him “a lot of experience with consumers” and in discerning their needs, as well as in forming retail strategies.
But Steve Kovsky, a principal analyst with market research group Current Analysis, believes that Ross' appointment could also portend a for-sale sign. “Ross' experience with mainstream consumer brands and international markets could also mean that the group is considering steps to attract a buyer,” he noted in a report.
Going forward, Ross said he would continue the rollout of CompUSA's new “superstore” format, which features a significantly expanded home entertainment section. The company completed a remodel of its fourth superstore last week in Plano, Texas, which joins retrofits in nearby Frisco and in Orlando, Fla. The Florida stores saw their home theater areas grow from about 800 square feet to upwards of 3,200 square feet, and Weiss noted that Panasonic plasma displays have recently been added to an expanding A/V assortment that includes such brands as Bose, Klipsh, LG, Mitsubishi, Pioneer, Samsung and Sony.
Current Analysis' Kovsky predicted that “Ross will be fighting an uphill battle to convince consumers to buy more CE products at is stores,” given CompUSA's long history as a computer specialist, its corresponding PC-oriented name, “and the absence of compelling deals on important CE product categories.”
Ross would not offer a timetable for the conversions, although the company had previously announced plans to upgrade about 100 of its 240 stores this year. CompUSA is also in the process of closing 15 underperforming stores in 11 markets around the country.
The privately-held business generated about $4 billion in sales last year according to TWICE's Top 100 CE retailers registry.
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