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February 4, 1999


By CBR Staff Writer

Computer retailing giant CompUSA Inc has confirmed that it will realign its organization to make its direct sales operations a stand-alone business. The Dallas-based company said in a conference call to discuss its quarterly earnings that it would separate key areas of its business, including the CompUSA Direct mail order and internet unit. An extra $2m to $3m per quarter is expected to be channeled into CompUSA Direct to prepare it for independence. The company said Thursday that it is currently mulling several possible plans, including a spin-off, which a spokesperson admitted is an attractive option given the current valuations of internet-related stocks. It promises a definitive statement on its course of action within 30 to 60 days. CompUSA Direct posted $83m in sales for the second quarter, out of total revenue of $1.78bn, which represented 40% growth year-over-year. The lion’s share of the business is still mail order but internet sales are rising at a far more rapid pace, with 100% sales growth in January alone. CompUSA reckons that as it builds up its internet operations, the majority of mail order customers won’t hesitate to make the switch.

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