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COMPUSA SHIFTS STRATEGY, CUTS JOBS.

DALLAS-Several consecutive quarters of soft performance have prodded CompUSA to reposition itself and adopt a new strategy.

The retailer plans to cut between 1,000 to 1,500 jobs and to close up to 14 of its 211 superstores.

The turnaround effort will change the company's merchandise assortment, inventory management and service and training offering.

CompUSA, which earned $18.8 million on $4.86 billion in sales during its first nine months of fiscal 1999, expects to take a $40 million to $50 million after-tax charge.

"We are fundamentally redefining CompUSA's entire business concept," said James Halpin, president and chief executive officer. "For the past several years, we have been concentrating on rapid growth and, most recently, the acquisition of Computer City.

"We are shifting our focus to improving operations."

Part of the new initiative includes moving the retailer away from its dependence on low-margin personal computers. Plans are to add personal digital assistants, PC accessories, cameras, camcorders, smart toys, DVD players and console video games. The Texas company also plans to "update" its superstore concept, and is testing various in-store presentations and department setups.

As part of its cost-cutting effort, CompUSA will move to a single-source distribution model for direct-sales customers, and will possibly outsource product fulfillment. Four stores are slated to close; five to 10 underperforming locations are under review.

Also on the agenda is improving employee training and customer service. CompUSA is considering taking over extended warranty service repair calls, which were formerly handled by a third party.

CompUSA hopes that taking over repair calls with customers and subsequent service will boost customer satisfaction and loyalty.

Earlier this year, the retailer slashed 200 jobs from its Internet division, called CompUSA Net.com, as part of a "streamlining" effort.
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Author:Vincenti, Lisa
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Geographic Code:1USA
Date:Jun 28, 1999
Words:291
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