What happened to CompUSA?

Readers of a certain age will remember CompUSA, a defunct big-box computer retailer. What happened to CompUSA? It went out of business, then came back as an undead brand, then went away again.

In some ways, CompUSA was the epitome of 1990s computer retail. It had huge big box stores with aisles of software and upgrades. It sold desktop computers, including its own house brand, Compudyne, manufactured for CompUSA by Acer. But the business model didn’t work as well in the 21st century.

What happened to CompUSA in 2012

In 2012, Systemax, the company who bought the CompUSA brand in 2009, decided to rebrand CompUSA and Circuit City under the Tiger Direct brand. Then, in 2015, Systemax closed all but four Tiger Direct retail stores. So if it seems like the CompUSA near you changed names a few years ago and then disappeared relatively recently, you’re not imagining things. That’s exactly what happened. Tiger Direct is still in business, but primarily as an online operation.

Systemax had purchased 16 CompUSA stores in 2008 and converted another 11 stores to the CompUSA brand name. Buying a defunct brand to get better name recognition is a fairly common strategy in marketing. Sometimes it works. In this instance, it didn’t work out so well.

What happened to CompUSA in 2008

What happened to CompUSA? Liquidation.
Here’s a 2008 photo of a CompUSA store as its liquidation wound down.

CompUSA had a 23-year run in retail, starting out in 1984 in Dallas and opening a second store in 1985 in Atlanta. In 1991 it changed its name from Soft Warehouse to CompUSA and became a national chain in the 1990s. CompUSA thrived, and in 1998 it bought one of its biggest competitors, Computer City, a sister company of Radio Shack. In 2003 it bought The Good Guys, another competitor. In 2005 it expanded several stores into a larger format. At one time it had more than 229 locations.

In 2006, it started downsizing, closing 15 stores. In 2007, it closed 126 stores. Most of the remaining stores closed in 2008, except for 16 locations that Systemax purchased.

What went wrong

Compudyne PC from CompUSA
In the 1990s, CompUSA thrived selling its house brand Compudyne PCs like this one. But they never carried parts so you could build you own, like some stores.

As Internet retail grew in the 1990s, CompUSA had a hard time competing. It also didn’t have a lot of things that electronics chains and office supply chains didn’t also carry. People went to CompUSA when they needed something the same day, but frequently, consumers had more than one choice for the things CompUSA carried. CompUSA had a better selection of components like power supplies, video cards and hard drives than the other stores, but that wasn’t enough to make enough people drive 10 more minutes. And the prices weren’t really any better than anyone else’s.

Regional chains like Fry’s and Micro Center carried specialty, enthusiast items like motherboards and CPUs for people who wanted to build their own PCs however they liked them. CompUSA didn’t do that, so that limited foot traffic.

The other problem was the help. This is a common problem in retail, as most people who can be really good salespeople at computer stores can make more money working in an IT department somewhere. But I definitely get better help at Micro Center than I ever got at CompUSA.

Over time, I found myself going to CompUSA for only two reasons. I’d go if I needed something today. It helped that the store was about three blocks from where I worked. And admittedly, for some things, I had no other local option without driving a lot further. I wasn’t happy paying $60 for a three-foot SCSI cable, but I was in a hurry. But most of the time, I went there because something was on sale. I’d buy the sale item, and probably only the sale item, then get out.

Retail experience that works

Retailing isn’t my area of expertise and neither is marketing. But the computer retailers who are left seem to have a draw. They aren’t just enthusiast stores, but they have things to cater to enthusiasts and get them in the door. Both Fry’s and Micro Center sell motherboards and CPUs and everything else you need to build your own PC. The prices don’t always beat ordering online, but sometimes they do, and you can get it today.

Not everything the two stores sell is cheap. If you need an Ethernet cable right now, you can get it at Micro Center. It will be cheaper online. Some networking stuff is cheaper at Home Depot, even. But the model seems to work for them. Some people will buy it because they don’t want to make a second stop. Some will buy it because they know they won’t get good advice on computer networks at Home Depot.

Limiting the number of stores probably helps too. At its peak, CompUSA had a couple hundred stores. Micro Center has 25. Fry’s has 34. That’s a lot less stale inventory. Exactly how many of those $60 SCSI cables did CompUSA ever sell? Keeping a couple of them in every store in case a dude like me ever wandered in cost money. With fewer stores, you can better afford the oddball stuff. For that matter, you can carry eight times as much oddball stuff and become something of a destination. When Micro Center first opened in St. Louis, I was impressed with the number of things it carried that CompUSA never did. I’ve lost track now. The end result may very well be that Micro Center has less trouble with stale inventory in spite of carrying so much more oddball stuff.

So that’s what happened to CompUSA. And since the name doesn’t have the cachet that Fry’s or Micro Center have, I don’t think it will be back. It’s probably gone for good now.

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