CompuAdd

~ the obit ~

Bill Hayden put $100,000 of part-time real estate money into a computer business in Austin in 1982 and ran it out of his car until the receipts reached thirty thousand dollars that fall. Then he took a small office and called it the cave. The plan was to resell add-ons for other people's computers by mail, and the name says exactly that. The ads ran as multi-page spreads in the PC magazines.

Within a few years he was building the machines too. From October 1989 CompuAdd stopped buying third-party motherboards and cases and designed its own line, and the catalog filled out with its own disk controller and its own video card. The customers were corporate and governmental as much as hobbyist. CompuAdd supplied point-of-sale systems to Sears, and a CompuAdd 386 was rated and tested by the US Army for use on its mobile missile system in the 1991 Gulf War. By early 1992 sales had nearly doubled to about $524 million, which in Austin made it bigger than the company across town that had started two years after it under the name PC's Limited.

Then it went the other way. All 110 stores closed in March 1993, Chapter 11 followed in June, and the company came back out that November with 75 percent of itself handed to unsecured creditors and Hayden down to twenty percent. He resigned as chief executive within the month and Richard Krause took over. A Philadelphia investment partnership, Dimeling, Schreiber & Park, bought the company in October 1994. Fifteen months later Computer Business Review ran a piece headed CompuAdd Computer Corp is preparing to liquidate, and the detail underneath it was that nobody in Austin would pick up the telephone.

~ the rap sheet ~

~ a hundred and ten storefronts ~

The retail idea started in 1988 and moved fast. Fifteen stores by early 1989. Somewhere between seventy and eighty by the end of that same year, and a hundred and ten by 1992, of which only about half made money. Wikipedia's account of a 1992 internal split puts the number at 125, which does not reconcile with the 110 everyone else uses, so treat the exact count as approximate.

The logic was not stupid in 1988. People were nervous about buying a thousand-dollar machine from a magazine advertisement, and a storefront answered that. What the storefront also did was add rent and staff to a business whose entire advantage over the brands in Sears was that it carried neither. Dell, across town, declined to make the same move and spent the early nineties taking CompuAdd's mail order customers with a cost base CompuAdd no longer had. In 1993 CompuAdd booked $233 million of sales. Dell booked $2.9 billion.

~ what the bank left ~

The Computer Business Review item of 18 January 1996 is the only document that records the ending. It says CompuAdd was liquidating after fourteen years, that an audit the previous week had turned up questionable financial practices and a senior officer had been fired over it, that the firm was down to a skeleton staff, and that the bank had foreclosed on its debts and put three hundred people out of work. The headline is in the present progressive, preparing to liquidate, so what the date really fixes is the day the collapse was reported rather than the day the doors shut. No announcement came out of Austin, because by then there was not enough left in Austin to make one.

One piece of it did get out. The British arm had already bought itself out from the American parent, completing the deal in 1995, and CompuAdd Computer Group Ltd of Bristol went on trading under the name with its own distribution. Its managing director, Martin Vincent, was the person the trade press could actually reach for a quote about Austin.

~ you did not buy a computer by mail ~

Mail order could not have worked in Turkey then, and the reason is narrower than geography. It needs a postal system people trust with expensive objects and a payment instrument that works at a distance, and in the Turkey of the early nineties you had neither. You bought a computer by walking into a shop on a street full of computer shops and watching somebody assemble it on the counter from parts you had just argued about. That model outlived CompuAdd's by a long way, and it is still how a good number of machines get bought where I live.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »