Save up to $300/year on phone billsSay good-bye to Circuit City
When Circuit City announced on Monday that it was closing 155 stores amid financial trouble, it didn't surprise me at all. If you've been following this page over the past year and a half, you know that I've been saying since the beginning that Circuit City doesn't have the chops to stick around and compete with Best Buy.
(Credit: Circuit City)And although yesterday's announcement was probably a shock to some at the company, it shouldn't have been. For the past few years, Circuit City has been the victim of one of the steepest declines this industry has ever seen.
Right now, the stock is in danger of being delisted from the New York Stock Exchange, thanks to a share price that can't make its way above the $1 mark. In fact, even after announcing the closure of 155 stores, the company's shares rose only 10 cents in daytime trading, bringing its stock price to 36 cents per share.
We can't forget, upon analyzing Circuit City, that this isn't the end of store closures, nor the beginning of financial success. The company is now going to engage landlords in negotiations to "aggressively" reduce rental rates in stores nationwide.
Once that initiative fails--and it will--Circuit City will have no other option but to close even more stores as it tries to find the right balance between size and financial stability.
To make matters worse, it will be delisted from the NYSE. I simply don't see any way the stock price can gain almost 70 cents in a short amount of time to get regulators off the company's back. And once that happens, any influx of cash Circuit City was hoping for will be lost, and it will be forced to close even more stores.
The end is near for Circuit City. Its decision to close 155 stores was an opening salvo in the hopes that shareholders would take notice and believe the company had the ability to turn things around.
Unfortunately for Circuit City, the shareholders didn't fall for it.
The company may be an attractive target for at least one company in the industry. After all, CompUSA was picked up by TigerDirect, and now some CompUSA stores are open in Florida.
But then again, maybe Circuit City isn't as attractive to acquiring companies as it wants to believe. Maybe companies realize that Circuit City is a dog and will never be able to compete with Best Buy in brick-and-mortar stores or Amazon.com online. Maybe they realize that with a stock that's in serious danger of being delisted, it has no hope of repairing shareholder confidence. And maybe they realize that Circuit City's days are numbered, regardless of the amount of cost cutting and expense slashing in which the company engages.
I've said it once, and I'll say it again: Circuit City is a dying company with no viability to, well, anyone. With Best Buy and online retailers squeezing it out of the market, I honestly don't believe that Circuit City will be around even a year from now. Strapped for cash, facing an avalanche of competition, and in desperate need of solid revenue, Circuit City looks like company that simply can't survive in today's hotly contested environment.
The game is over. And Circuit City lost.
Check out Don's Digital Home podcast, Twitter feed, and FriendFeed.
Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
- Topics:
-
HDTV,
-
Digital Home
- Tags:
-
Circuit City,
-
Best Buy,
-
Retail,
-
Acquisition
- Share:
- Digg
- Del.icio.us
as far as the product being out of stock, why do you keep going back? Because the prices are great.... CC will never have a better price than best buy, and if they do, they price match each other to death. So, instead of complaining about a product being out of stock, do what the rest of america does and line up on a sunday morning if you want a product. Your car/legs/wheels work just as well as everyone else who is willing to brave a weekend shopping trip to get the product that they want. I hate when people complain about a product not being in stock.... i have NEVER had a product be out of stock on a day i went...because i go on sundays, when the ad is new, and I get what i need. and I have NEVER had a complaint for either of the stores, because i camp at both of them.
Why anyone would *need* to camp out a big-box store just to get something advertised is the real problem. This isnt Soviet Russia of the 70's and its that mentality that is becoming the ruin of these stores. Add to that the removal of commissioned sales-people and this is what happens. When sales people are motivated by their income they try harder and there isnt the incessant price-match wars because both sides know that there is no point in dropping too low because then youre working for free. If theyre all on min-wage hourly you wind up with 17 year-old kids that have no interest in wether you got the right item for your needs but that you got the hell out of their hair so they can go back to "bench-testing" the newest HALO game. Add to that the appalling lack of product knowledge that ALL of their associates have as well as management teams that see training as an inexcusable interruption of their valuable coffee time and you get to the root of the failure.
Why would I waste my time at a big-box when I can get it safely and promptly from an online retailer? Either way I'M the one who is going to have to research what the tech terms mean because the idiots working there wont know, I'M the one who'll have to carry the box to the car 'cause the porters are NEVER around and I'M the one who'll have to get it fixed 'cause the 3rd party warranties seem to be written by magicians who specialize in disappearing acts.
Good riddance CC- take Best Buy with you and swing by and pick up Fry's Electronics and OfficeMax on your way out.
I'll either more for good service and followup or spend less on line.
Circuit City started as a consulted sales business for major appliances, soho, TVs, stereo, and small electronics; dubbed A.C.E. Their business was centered around that and grew because of it. In 1994 I went through 5 interviews to get a job there, and successfully turned them into an operation that sold more then a 100 computers a month, up from just 2 a month when I arrived months before. But all of this required support for customers they were unwilling provide. It took me off the sales floor to help customers, and thus dropped my income. I told Circuit City managers that we needed to address these problems by allowing me to teach computer sales and technology at a fixed salary to support this particular growth. It didn't happen and I left. I visited my friends there about a year later. They had started to hire anyone who filled out an application. No one knew a thing about the products they were selling. Their reputation when from good to horrible in a short amount of time.
If you want idiots to sell junk then you need to adopt the processes of a Fry's Electronics or Best Buy. Their transition is so flawed I told they would lose the business to Best Buy as I left. I specifically said why, and one manager there was bright enough to agree. The store manager left to Good Guys. Which also fell apart.
In any business, the process itself must fit the architecture of the store, and visa versa. If you want to sell junk, you need to allow people to pick it up and walk to a check out in a short amount of time. No one needs a consultant to make a buying choice for a DVD. That's why SunCoast will just kick your butt in that kind of a business. You walk in, look at the Tuesday releases, and you are out of there in a few seconds. That's how junk stores work.
Alex Alexzander
I guess he doesn't realize that CC hasn't had comissioned employees since February of 2003... that was only 5 years ago...
All of their firedog employees are Microsoft Certified and a majority of them have a degree or certificate in computer science or networking or something relevant... as for training, When I was employed there, we were required to have knowledge of every single product we sold, how to use it, and basic trouble-shooting...
Perhaps the reason they didn't keep him on as a salaried teacher was because they knew what he really was... a cocky moron with a God complex.
Personally I hope that they can pull out of this O.K. as I do have a lot of friends that work for them.
The firedog associates are absolutely NOT Microsoft certified. I challenge you to go to a local best buy OR circuit city and find one geek squad idiot, or firedog idiot, who has any real certification. They dont. Sorry.
CERTIFIED ENGINEERS? TRY CERTIFIED MORONS!!!
Of course Hillary's post was absurd.. look closer at Hillary's last name.
I don't buy into the end of CC. BBY is in the same market, faced with the same online pressures. It's an issue of management if one is succeeding while the other is failing, when they're both in the same market. CC just needs to either get rid of management or take a really close look at BBY and figure out what's boosting their margins.
A couple of annoyances I've observed over the years:
1. Their prices fluctuate at least weekly, and that's not just because of goods switching between sales.
2. Their prices online are sometimes not advertised in-store, even if the price rings up the same at the register and vice versa (hurts both ways).
I live in Henrico, and go to the starbucks on Gaskins road about a 10th of a mile from the CC headquarters. I have not supported the company since their decision a few years ago to lay off all of their long time employee's and make them reapply for their jobs at a lower pay. I don't think thats a way to save money. However if they restructered and got new management, I can still see them easily pullingthemselves out of this. They just opened a new store about 10 miles away, so they are still viable in some markets.
I often wonder if it's company policy for them to avoid helping customers.
While I'm sure it's an exception, our local Circuit City has stained & threadbare carpeting, moldy collapsing ceiling tiles, misplaced & messy inventory, and employees that are both useless and clueless. It's been this way for years. The management doesn't care and blames corporate when I've asked about the poor condition. It's just not a pleasant place to shop. And this store is NOT on the list of those being closed. And they wonder why their parking lot is 20% as full as Best Buy's.
While I'm no great fan of Best Buy, at least the local store is clean and the employees have a pulse.
I saw the store closing chart and they're pulling out of AZ completely (13 stores). The BB are not many, really scattered and service is good, but low/out inventory too much. We have 2 Fry's stores, run by idiots like CC. (Editors' note: Offensive comments removed.)
http://newsroom.circuitcity.com/directors.cfm
Employees are generally drilled on specific sales points, so even a tech "idiot" who studies his bullet points, can score some type of customer satisfaction versus the Wal-Mart person who shuffles their time between stocking shelves for the toy department and then selling cameras a week later. How hard is it to find a bright blue shirt? Or an open register? All stores have a similar, generic floor plan, and are clean, neat, and free of clutter IMO.
That's the major difference.
They did it again and now I have to learn the entire layout once again and this is pure hell for one who has been hit by mother nature and rushed to the local hospital for an EKG. My memory is pure hell now and what Best Buy is doing by chainging things around makes me stress out shopping there.
This was no surprise to anyone who's walked into a Circuit City in the last five years. That place is a joke.
-
by topnotch777
November 4, 2008 10:11 AM PST
- I know we blame the clerks, and that is partially true but lets not forget the management is worse than the clerks, and the management reflects the views of the company. The fish stinks from the head.
-
Reply to this comment
-
See all 114 Comments >>