CompUSA To Shed Additional Stores, Carlos Slim, Report SuggestsCompUSA To Shed Additional Stores, Carlos Slim, Report Suggests

CompUSA, which has been shedding stores at an increasingly rapid rate since the beginning of the year, may be looking to shutter more or do a deal with a rival electronics chain, according to a report in Friday's Wall Street Journal.

The newspaper said the chain has talked with rivals Circuit City Stores, Micro Electronics, and Systemax on a deal to take over some of its business. CompUSA has been closing stores in recent months as it has experimented with efforts to build a successful business. Its online auction effort and its strategy of targeting small and medium-sized businesses haven't been enough to staunch the financial bleeding.

A bigger concern, however, for CompUSA is the potential departure of its largest investor, Carlos Slim.

Slim, who Forbes magazine says is the richest man in the world, is the top executive of Mexico's national telephone company, Telefonos de Mexico. He also was a major stockholder in MCI before it was acquired by Verizon Communications and in recent months has teamed up with AT&T in looking at telecom acquisitions.

But his CompUSA investment, which Slim acquired in 2000, hasn't worked out as planned. Under pressure from Best Buy, Circuit City, Wal-Mart, and other big-box retailers, CompUSA has been shuttering stores all year.

So if Slim leaves, is CompUSA gone? Perhaps, and perhaps not. The Wall Street Journal said Circuit City looked at some 50 CompUSA store locations, but declined to make any deal with CompUSA. The newspaper also noted that Slim had bought a 9.2% interest in Circuit City for $1.5 billion in 2003, but later sold the stake after Circuit City's management spurned his advances.

Estimates from quoted unnamed industry executives suggest CompUSA's sales would likely decline to $1.5 billion this year from an estimated $4 billion last year.