What caused CompUSA and CircutCiity to fail?

[Amol S.]

I was in elementary school when they went kaput. So I don't know much about what caused them to fail. I would like to know ... in detail.

 

[John Connor]

In detail?

 

[RockinZ28]

People figured out they could get shit for 50% less online?

 

[VirtualLarry]

CompUSA was known for poor inventory / supply-chain management. At the closing clearance sale at my local store, it couldn't have been more obvious. When a good portion of your inventory is un-saleable junk, well, that's a problem.


Circuit City, well, they eliminated sales commissions, fired all of their more experienced floor salespeople, and hired HS kids for min. wage. Didn't turn out so well for them.

 

[OutHouse]

i loved compusa. they carried parts like chassis fans and other PC guts that if broke i could run down and get it.

 

[Capt Caveman]

i loved compusa. they carried parts like chassis fans and other PC guts that if broke i could run down and get it.

Thankfully, I have a Microcenter two blocks from my house.

 

[OutHouse]

Thankfully, I have a Microcenter two blocks from my house.

Denver only has 1 and its a 2 hour drive for me.

 

[John Connor]

Denver only has 1 and its a 2 hour drive for me.

CompUSA?

 

[OutHouse]

CompUSA?

Microcenter

 

[John Connor]

Microcenter

Oh.

 

[shortylickens]

What, is Google down again?

Main reason is failing to keep up with consumer demand. People wanted ridiculous selection at extremely low prices. As unreasonable as that sounds, Amazon and Newegg and the other online retailers were able to offer it.

 

[WhoBeDaPlaya]

Add TigerDirect to the list, although it was cool when HardOCP had the GTX 780 launch with Galaxy at the one near work

 

[renz20003]

Way too many players back in the day, natural selection took place.

The rise of low internet pricing along with a decline of pc sales put the nail in the coffin.

 

[thebestMAX]

I always had problems with the people who worked at CompUsa and Circuit City. BestBuy wasnt so hot either when they paid their clerks commission. TigerDirect was OK but went downhill. HHGreg always sucked. Of course I am talking about the people who worked in the stores in S. Floriduh, the nastiest people in the US.

 

[ultimatebob]

CompUSA's prices were almost always 25% more than what you could get them for on Newegg. So, people would just basically use them as a Newegg showroom unless they needed the part that day.

Circuit City towards the end just wasn't a pleasant sales experience. They were always trying to push $30 extended warranties on $60 products... really annoying.

 

[sdifox]

Rent is expensive.

 

[GagHalfrunt]

Rent is expensive.

And so are utilities, labor, shipping, distribution channels, etc

The economics of retail are poor, margins are low due to competition. And if your primary product is something people are comfortable shopping for online you're pretty much screwed. E-tailers can offer much lower prices than physical stores because their costs are lower, it's that simple. CompUSA and CircuitCity were the earliest casualties because they had the most tech-y customers who were the quickest to adopt online shopping.

 

[FeuerFrei]

I'd like to thank the internet for showing us just how much the local yokels were overcharging us, and freeing us from their tyranny.
I bought a helicopter online for $56. A few weeks later, I found the exact same model at a mall kiosk. The guy manning the kiosk wanted $300 for it!

 

[BudAshes]

Circuit City, well, they eliminated sales commissions, fired all of their more experienced floor salespeople, and hired HS kids for min. wage. Didn't turn out so well for them.

I worked at Circuit City when they did the purge. Either you got promoted to Manager, which was terrible as being good at sales does not make you a good manager or you got a "pay-raise" except your hourly wage going up didn't even come close to the commission some of the guys used to make. So most of the experienced salesman quit. I was 17 at the time making 9 bucks an hour and I was stoked. The management at the Circuit City stores was atrocious though, they hired people that were incredibly incompetent to manage the stores and the amount of inventory that was just lost every time they did inventory was hundreds upon hundreds of thousands of dollars. On top of that their business was mostly made by selling CD's(hah), selling crappy computers for inflated prices, and selling expensive TVs with expensive warranties that they encouraged all employees to blatantly lie about. LCD and LED TVs killed the prices for big screen TVs, peope realized they could by cheap computers online and people stopped buying CDs.

 

[rh71]

I go to CVS and price-compare Amazon and it's true Amazon beats them at almost everything but instant gratification. CVS is still in play.

 

[Genx87]

I worked for Computer City in high school. My recollection was ridiculous amounts of inventory that had rapid depreciation. And incompetent middle aged managers who didn't know anything about what they were selling. Computer City was acquired by CompUSA in 1998. I believe they were failing anyways during the internet boom. So that should tell you how poor their management was.

 

[Greenman]

Wasn't compusa bought out and shut down by a competitor?

 

[GagHalfrunt]

Wasn't compusa bought out and shut down by a competitor?

It was bought ought by Systemax which was the parent company of Tiger Direct. But CompUSA was dead long before that. Systemax got the name and under 20 retail stores, the rest had already been closed down. Systemax eventually put those stores down too. Systemax did the same thing with Circuit City. When the end was near they bought the brand, website and trademarks at a liquidation auction. They eventually dumped both the CompUSA and Circuit City names entirely and consolidated everything under the Tiger Direct brand.

Systemax eventually sold off the Tiger Direct division too.

 

[shortylickens]

I go to CVS and price-compare Amazon and it's true Amazon beats them at almost everything but instant gratification. CVS is still in play.

The kind of things you need from CVS cant be held off. If you need aspirin, you NEED aspirin. Waiting 3 days for Amazon to deliver aspirin is ridiculous. And paying extra for next day delivery of aspirin is crazy.

Nobody NEEDS anything same day from CompUSA. If you are running a business and you need computer hardware you'd go to a professional distributor, somebody that only serves the industry and takes really good care of their customers.

 

[Greenman]

It was bought ought by Systemax which was the parent company of Tiger Direct. But CompUSA was dead long before that. Systemax got the name and under 20 retail stores, the rest had already been closed down. Systemax eventually put those stores down too. Systemax did the same thing with Circuit City. When the end was near they bought the brand, website and trademarks at a liquidation auction. They eventually dumped both the CompUSA and Circuit City names entirely and consolidated everything under the Tiger Direct brand.

Systemax eventually sold off the Tiger Direct division too.

Perhaps I'm thinking of computer city then. It was a very long time ago.