Circuit City going down fast, closing 155 stores within days
By Justin Montgomery
Circuit City has been struggling for quite some time now, but things are getting serious. Among other cutbacks, the retailers has vowed to close down 155 stores within days.
Circuit City has become a victim of the recent credit crunch. Vendors that supply the chain with merchandise aren’t extending as much credit as they once were. According to CNet, the end result is that Circuit City can’t offer the same pricing as it once could, and in a tight economy, it may end in disaster. Add in the fact that Circuit City’s stock price has been below the $1 mark for a long time, and the threat of the NYSE completing de-listing the company for poor performance, and things look extra bleak.
The biggest surprise is that the chain will cut so many stores this close to the holiday shopping season. The lack of credit means shorter supplies, so I guess to fill the shelves of more important stores, they had to act quickly. The cut-back in overhead, employee pay, and other factors combined with the shopping season might give the retailer the boost it needs to get back on track.
Unfortunately, Circuit City seems to be going the same way CompUSA did a year ago. They closed up shop right in the middle of the holiday shopping season. CompUSA was more of a niche electronics chain, so i can understand their fate, but Circuit City has been around so long, and provides a decent selection in cities that usually don’t have other big-chain electronics stores. I’m from a small town, and Circuit City was all we had for a long time. Granted, we now have a Best Buy and Circuit City looks more like a ghost town, but it’s still in business.
Hopefully, this shopping season will prove beneficial for the company, and the steps they’ve taken will be suffice to help the chain through the rough patch.
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on Monday, November 3rd, 2008 at 11:06 pm
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Read more entries by Justin Montgomery.
Stumble It!
November 4th, 2008
Does anyone remember that Circuit City, just a few years ago, was the best performing company in Jim Collins’ book “Good to Great”? Obviously, Mr. Collins’ approach to management is worth some reconsideration given the fall of Circuit City. It would seem a new approach to management would be worth considering. Read more at http://www.ThePhoenixPrinciple.com
November 4th, 2008
Competition good. Circuit City management of their competition bad.
November 4th, 2008
Good riddance. Divx karma. Firing your best salespeople because they made too much money means you plan on competing on volume and price. Much of the appeal was having a selection of electronics in medium size towns that was neutralized by the internet and Walmart
I was in CompUsa last week. It was purchased by the parent company of Tiger Direct, and I actually have a reason to go there again. Lot’s of refurbs and OEM closeouts and techie components normally only found online now.