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To: Wowzer who wrote (6339)	11/11/1998 9:14:00 AM
From: Jay Ray	Respond to of 7247

CPU News... Nov 10, 1998 (Tech Web - CMP via COMTEX) -- CompUSA bought Computer City because other retailers, including two "sophisticated" companies, were eyeing the ailing chain, CompUSA CEO Jim Halpin said Tuesday. "Computer City had been out there for the past four years, bleeding, but there were some serious retail players looking at it," Halpin said in a conference call with analysts. "There were two sophisticated retailers looking at it that could buy it and make it work." Halpin declined to identify those retailers. His comments came in response to an analyst who questioned what CompUSA had to show for its $211 million purchase of the chain. Since buying the chain from Tandy in late August, CompUSA has closed 55 former Computer City stores and three of its own that were in overlapping markets. CompUSA also sold seven former Computer City stores in Canada to Future Shop this month. CompUSA absorbed the remaining 39 former Computer City stores. Halpin said CompUSA has effectively switched the former Computer City stores to CompUSA's format. "I'm ecstatic, absolutely ecstatic, about the way our organization put the brakes on that company," Halpin said. "The amount of progress this company has made in terms of stopping the bleeding, doing the conversion, getting the signing, getting the red shirts, and getting them to look like CompUSA stores, I believe, is nothing short of phenomenal." Analyst Troy Showalter of Baldwin Anthony & McIntyre in Dallas was less impressed with the Computer City purchase. "If you look at the numbers, they spend $211 million, and they're keeping 39 stores open," he said. "That means they paid over $5 million per store." Showalter said CompUSA could have installed its own stores for $2 million to $3 million each. "It looks like they paid $100 million too much to eliminate a competitor," Showalter said. "Whether they bought [Computer City] or someone else did, they're still going to have competition."