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Shop Talk

Retailers, consumers and prices

December 7th, 2007

More closures seen in electronics

Posted by: Karen Jacobs
Tags: Shop Talk

bbuylogo.jpgThe U.S. electronics sector has thinned over the past year as some chains closed stores, and one analyst says more changes could be on the way that may help major players such as Best Buy and Circuit City Stores as well as office supply centers.

CompUSA, the retailer owned by Mexico communications magnate Carlos Slim, is likely to close more stores and perhaps leave the business, Goldman Sachs analyst Matthew Fassler said in a research note on Friday.

Earlier this year, CompUSA announced the closure of 126 stores, more than half its U.S. locations, to focus on top-performing outlets. A November news release said CompUSA now has about 103 U.S. stores.

The Wall Street Journal reported on Friday that CompUSA this fall contacted rivals such as Circuit City and Micro Electronics about taking on underperforming stores and other operations, citing people familiar with the matter.

“We believe an outright closing of these units would be a positive development” for Best Buy, Circuit City, Office Depot, OfficeMax and Staples, Goldman’s Fassler said in his research note.

Circuit City spokesman Bill Cimino confirmed that representatives for CompUSA had approached his company about possibly taking over 15 properties. “We took a look at it and decided not to pursue it,” he told Reuters.

In September, Best Buy noted a better competitive landscape heading into the holidays this year in the wake of the store closures at CompUSA and Tweeter Home Entertainment Group, which filed for bankruptcy protection and was acquired by another company.

CompUSA did not return a phone call for comment.

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