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CompUSA Outlines Its Changes At RetailVision

4/18/2007 08:31:00 AM Eastern

Nashville, Tenn. — A CompUSA executive answered some tough questions from vendors and spent time explaining what is now taking place behind the scenes at the chain during a presentation here at Spring RetailVision yesterday.

Landon West, CompUSA’s e-commerce director, said despite the massive restructuring that saw 900 front office workers getting laid off and 126 stores being closed, the company is still in the process of making changes, but these should lead to the former computer specialty retailing giant back to profitability. These additional adjustments include reducing the number of SKUs carried per store, reorganizing the merchandising and buying departments and changing how products will be added in the future.

In addition, West took the opportunity presented by his seminar to apologize to the assembled vendors for any recent problems that have occurred during and prior to the transition.

The change most directly effecting vendors will be getting their products placed into CompUSA, West said.

“We are scaling back SKUs to concentrate on those delivering high turns and high profit. It is going to be harder to get into CompUSA for the time being,” he said, adding the chain’s buyers will no longer pick up a product simply because the vendor promises co-op funding.


 
Landon West

“You can’t run a company like that,” he said.

Internally the organization removed the internal silos that had separated product categories, making it difficult for vendors to deal with the company. Several vendors on hand complained that they would have to deal with several different buyers even though the products were very similar. West said this would no longer happen. To fix this, everything is now organized around buying, marketing and moving products. There are now three merchandise categories: information technology, entertainment, and technical parts and services.

These will allow CompUSA to again pay attention to its core customer base, something the chain had been remiss in doing in the past, West said. Going forward, CompUSA’s primary customers will be “the techie,” professional buyers and small and medium businesses. West said the latter group was particularly neglected.

With fewer SKUs to be maintained, the chain will have to redesign its store layouts with, possibly, a greater number of CE products carried, although nothing has been finalized, West noted. The reason this is still undecided is the company wants to stick with products associated with its three core customer groups and CE falls outside of this strategy.

In addition to explaining these internal changes, West gave some insight into how CompUSA got so far off track. He said the company grew in a somewhat haphazard fashion with new product categories and services being tacked on. The corporation also made some poor real estate choices, he said.

“We had too many stores in bad locations. You had to drive passed three Best Buy [stores] to get to us,” West said.

The sites CompUSA chose to remain open are mostly in secondary or more rural markets where it feels it can be more competitive.

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