CompUSA to Acquire Computer City

On Monday, CompUSA and Tandy Corporation announced that CompUSA had agreed to purchase Computer City from Tandy. The sale will be for US$275 million and should be completed within the next 90 days.

"We are extremely excited about this acquisition as we believe it will further enhance CompUSA's ability to be a 'total solutions provider' for our retail, corporate, government, education, mail order, technical services, training, and build-to-order customers," said James F. Halpin, president and chief executive officer of CompUSA. "We believe this will allow us to provide our customers with additional products, superior service, and added convenience. We anticipate that the purchase of Computer City will have a positive impact on future earnings and cash flow of CompUSA, and that it will be beneficial for our customers, shareholders, and employees."

With all mega-mergers, the first question is about layoffs. Since CompUSA and Computer City have many stores that compete in the same areas, it would seem senseless to have two stores bearing the same name. At this time, CompUSA said that it had no comment about whether this would happen and said it would have more details when the transaction is completed. One thing that was pretty definite is that Computer City will remain with the same name in Canada.

CompUSA currently has 160 stores in the United States and still plans to open another 20 stores nationally.