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Thursday, Nov 30, 2023

The Briefing

Homi Shamolian is president of Computer Palace, with three stores in Glendale, Tarzana and Santa Monica. Shamolian, a native of Iran, started the company in 1981 with roughly $13,000 and quickly became known in the Los Angeles area as one of only a handful of computer retailers and service centers. All that changed in the early 1990s with the birth of retail computer superstores such as Fry’s Electronics, COMPUSA and Dell Computer. Shamolian spoke with reporter Jacqueline Fox recently about how a shift in strategy helped him respond to the new competition. “When I started this company in 1981, there were only about six computer retail stores in the area. We were doing quite well, so we expanded to nine locations and really had a strong presence in the marketplace. “But then the computer superstores came to the market in the early 1990s and that hurt us so much. That was the most challenging time for us; we couldn’t compete with them because they were able to offer customers a much better price on their products than we were able to get from our own distributors. “So I disenfranchised six of the stores and scaled down to three. I had to fire 16 to 20 people, and that was very difficult; some of them were with us for five to 10 years. That’s a very hard thing to have to do. “We turned our business into mostly a service business for corporate accounts and, although we still are a retailer, we focus on providing service on networking and Intranet systems. And we are doing very well. “Our volume is not that much bigger than it was before, but we have a staff of 35 in the three stores and what we try to do is provide a more professional type of service than just moving the boxes out of the store. “That’s what has helped us stay alive. We give our customers service and training on our products. We don’t just sell them the product and send them on their way. They don’t get the hands-on service at the superstores. And, although the Internet isn’t helping us because customers can purchase computer products nationwide, customers don’t get the kind of after-sale service we provide. “Most people go to the superstore, pick up the box and leave. But you don’t get anybody to help you set it up or explain or be there when you have problems. We offer A-to-Z service for our customers and, because of that, we are starting to see some of our former customers come back to us.”

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