Computer City - History - Acquisition By Tandy

Acquisition By Tandy

Ultimately, Tandy bought the Computer City concept and store in 1991 and launched Computer City as a national chain (as well as Incredible Universe). Alan Bush, a Radio Shack executive, was named president of the new company.

The stores resembled CompUSA's super center concepts, but lacked the financial backing CompUSA had. CompUSA, having a larger market share, bought the company, and in the process, shut down one of its smaller competitors. Two types of store models existed, one was a full size store with an in house Tandy Repair Center similar to a freestanding Tandy Repair Center that still service RadioShack stores today, now called RadioShack Service Centers. These stores had sub departments for business sales that would just handle business orders for companies and other organizations, they also offered in store customer training classes for software such as Microsoft Excel, Word, and Powerpoint. Some of these locations were as big as some Best Buy Stores. They also operated Computer City Express stores which had no service center in them, nor did they offer classes. They were closer in size to a large RadioShack store.

In its Westbury/Garden City New York location, Computer City opened right next to its main competitor CompUSA. In King Of Prussia, PA, Computer City was directly across the street from CompUSA, and was in plain sight from CompUSA's main entrance. However, Computer City's entrance opened toward an off-street parking lot.

As both Computer City and Tandy's other venture Incredible Universe were both having financial issues, the computer departments of Incredible Universe were changed to Computer City.

The Westbury, NY Incredible Universe was also within 3 miles of the above mentioned CompUSA and Computer City. This may have hurt both of these Tandy divisions.

One hallmark of Computer City's retail concept is that the store operated much like a grocery store; customers could not only browse, but select and purchase almost all merchandise without the assistance of a salesperson. Furthermore, until mid-1996, the floor staff did not have revenue quotas and were not paid on commission, though bonuses were applied for selling either the extended warranty Computer City Service Plan (CCSP) or in-store training classes. In retrospect, this model was seen as creating a competitive disadvantage, as computers were still new to many customers in those days and a lack of qualified and knowledgeable salespeople, who had no incentive to self-improve, led to frustrated customers and high return rates.

Compared to Circuit City, a main competitor at the time, Computer City's operations and point-of-sale terminals were severely behind the industry. Individual stores had no control over the inventory they were shipped, and the computer systems were not linked between locations. Further, the POS system was not equipped to handle multi-item package promotions; cashiers were required to manually calculate and input adjusted prices for each item in an advertised package. This led to severe customer service issues, causing serious delays during checkout and for exchanges/returns.