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CompUSA Spotlights CE With Samsung Deal

With CompUSA searching for sales opportunities outside the flagging PC category and Samsung’s need for a showcase for its high-end CE products, the companies new joint venture should be a boon for both, said each firm’s CEO.

The first Samsung store-within-a-store opened two weeks ago in six CompUSA locations in the Miami area. The facilities, located in the center of the store, feature a glass counter and shelves holding about 30 Samsung products ranging from digital audio and DVD players to a 24-inch HDTV-ready LCD monitor. CompUSA CEO Hal Compton and Daeje Chin, Samsung’s digital media business CEO, said the concept dovetails perfectly with how each is trying to position his company for the future.

“We want to move away from just being a PC store,” Compton said.

Meanwhile, Samsung is hoping to swing the high-tech consumer’s perception of the company as only a semiconductor maker by showing them a wide range of digital products, Chin said.

Samsung has sold monitors and some telecommunications products through CompUSA before, but this is the first time these, along with the company’s CE products, have been consolidated in one area, Compton said.

“This is a unique concept and the only place where all our high-tech products can be seen in one area,” said James Sanduski, Samsung’s marketing director, visual media products group.

The Samsung store, in its initial configuration, has products lining one side of a product island. Samsung and CompUSA are using these six stores as a test bed. The concept is expected to be spread throughout the CompUSA chain. It will undergo changes and could be expanded to include more of the product islands once the companies discover what works best, Compton said.

The area is dominated by several flat-panel TVs and computer monitors, while the company’s digital cameras, digital camcorders and portable digital audio players are arranged along and inside the counter area. Samsung’s home office division is also represented with the inclusion of the ML-1210 and ML-1650 laser printers.

Samsung used the store openings to debut a few new products, including its first TV/DVD player combo with a $499 street price, and the DVD-R2000 $2,499 DVD-RAM home recorder.

The fact that the Samsung store is dominated by such pricey products does not worry CompUSA executives. Compton said it fills a huge gap that had existed in the retailer’s merchandise mix.

“We had been a price/item driven retailer, but with this showcase we can push the high-end. Since we are considered the store to go to for cutting edge products we often had customers coming in asking for new products that we did not carry, but now we do,” Compton said.

To prove this point, Compton said the staffers assembling the Samsung stores sold some of the floor models as they were installing them, making it difficult to complete the project on time. Still, he admits it is an odd sensation to see products priced in excess of $7,000 on his store’s floor.

The sales associates at the Samsung store were specially trained by the manufacturer and are tasked with only working in that section, unlike other associates who move from area to area as they are needed.

“With this type of product, customers need lots of help,” said Chin, adding that several hundred hours were spent bringing the CompUSA people up to speed on the Samsung products.

The basic product list, which will be the same for all six stores, includes four flat-screen computer monitors, including a 24-inch HDTV-ready unit. Also in from the PC side are the SM-308BE CD-RW/DVD-ROM drive and a conventional CD-RW drive. From the telecom side are three cell phones, one featuring Internet access and one with an onboard MP3 player.

The television offerings include the SPK4215 42-inch plasma screen and the DynaFlat TSL3095WHF HDTV and the 20-inch combo TV/DVD player. Another featured product is the DVD-V1000 Multi Format Player that contains a VCR and DVD player. Filling out the lineup are digital cameras, camcorders and several portable digital audio players.

There are no plans to bring in any of Samsung’s more run of the mill televisions, VCRs and audio products. “There will be no basic CE products, just the fancy digital products,” Chin said.

However, Compton was not limiting what his store might eventually carry. Since its purchase last year by the Mexican conglomerate Grupo Sanborns, the chain has explored the issue of adding CE products to its shelves. He said the possibility exists that more traditional CE products, from other companies, will be brought on. More details on this plan were not available.

The Samsung store was installed in each store during their recent renovation, a project that will include each store in the chain. Compton said this entails moving all the communications and handheld computer products to the front of the store, along with highlighting digital imaging devices.