Timeline: How Circuit City Came Undone

Bankruptcy is a time for reflection, we guess, so we put together a nice little time line of Circuit City’s precipitous decline over the past 2 years. We begin our journey in March of 2007, when Circuit City announced that it was firing everyone who knew what 1080p meant so that they could hire cheaper labor…








(Photo: corsec67 )




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  1. Uh oh... Cleveland says:

    I would love, love, love if this thing could be traced back to the firing of the experienced employees, who would be presumed to give a more satisfying, helpful shopping experience and thus would be a lesson to companies who want to cut back on customer service.

    But then you look at Tweeter, who, except for a few examples, had good, knowledgeable employees and is going through similar problems. Damn.

    • buckfutt says:

      @Uh oh… Cleveland:

      Yep, that’s what happened at HiFiBuys, too.

      I’m sure running off everybody with a brain cell didn’t help things any, but let’s face it, Circuit City was a crappy store for years. The only thing they were good for was price-matching, and the firings just made a bad situation worse.

    • CarlR says:

      @Uh oh… Cleveland:

      I agree, if you look back 3 years instead of just 2 years, you’d see that CC’s stock price began it’s death spiral long before the mass firing.

    • sleze69 says:

      @Uh oh… Cleveland: Because of the size and popularity of Circuit City over the years, this will be a great lesson for business schools, if it isn’t in some courses already.

    • woogychuck says:

      @Uh oh… Cleveland:

      Keep in mind that Tweeter sold high-end stuff, so there market was a bit different. Tweeter failed because the average person can’t tell the difference between a $8,000 TV and a $1,500 TV. Combine that with a recession and Tweeter is f#$%ed.

      • katylostherart says:

        @woogychuck: well i wouldn’t say we can’t TELL the difference we just can’t afford to care that much about a tv.

        our tweeter is still alive. i wonder when its expiration date is.

    • snowburnt says:

      @Uh oh… Cleveland: I don’t think you can really pin it on a single thing, except for different examples of poor management, or even draw that single parallel to a different company. Circuit City was built as an electronics and appliance store. They seemed to rest on their laurels for way too long. They didn’t expand enough, they didn’t upgrade their store fronts, they didn’t innovate in any way. They became like RadioShack only bigger when Best Buy came into town. If you want to compete, you have to compete.
      From the looks of the graph/timeline, the stock was slipping before they released the quality front-line staff. So it wasn’t the beginning of the decline, but definitely the beginning of the end. Rather than looking to raise the top line, they looked to lower the bottom line, and that bottom line can only go so far. One thing I hear time and time again, it’s far less costly to sell to an existing customer than to put your efforts to bringing in a new one. Furthermore, happy customers multiply due to word of mouth. Even further, angry customers will drive business away faster than a happy customer will bring in new customers, and the duration of an angry customer is decades long.

      Unfortunately, during these greedy times, the people that were making the decisions were only looking at THEIR SHORT TERM top lines, rather than their company’s long term top lines.

    • eXo says:

      @Uh oh… Cleveland: Best Buy management stopped considering circuit city a competitor back during the holiday season of 2005. I worked briefly in the geek squad there, and weekend meetings always had a brief interlude on how circuit city had shot themself in the foot that week. Best Buy is no saint, all i’m saying is that inside the big box industry this is no surprise at all – they have seen it going this way for 3 years now.

      • Con Seannery says:

        @exo: Yeah, I will say that, despite its shortcomings, Best Buy is worlds above CC. I mean, the CC business model of placing itself across the street from Best Buy and then providing worse service than their biggest threat was just stupid, but Best Buy also beat them into submission and watched the freefall. While Best Buy doesn’t have the best customer service, outside of the computer department, it isn’t too bad.

    • thrlsekr says:

      @Uh oh… Cleveland: Tweeter failed because they over expanded in markets that were already retailer saturated and replaced their regional culture niche that was thriving at the time with the Tweeter culture, which was no different then the CC or BB culture, and why would you go to any of these places, HiFi Buys in GA and Sound Advice in FL (examples), when you could get the same products less expensively from the nationals.

      • getz76 says:

        @thrlsekr: Right on, “Uh oh… Cleveland”. If you are going to be a niche seller, you need to differentiate yourself from the competition. Tweeter was never going to compete with BestBuy and should not have expanded into those areas.

        BestBuy is next, though, if it does not refocus its business. Wal*Mart/Sam’s Club/Costco/Target will be cutting into their sales significantly not only based on price but also because BestBuy will be struggling to offer the ridiculous credit terms to comsumers it has over the past couple of years. BestBuy should shed all of the non-core sales; stick with TV, Audio and Computers. Get out of wireless and households. Keep high margin (CD/DVDs) for the impulse buy, and they should be fine.

        • Chris3000 says:

          @getz76: This might come as a surprise, but CD/DVDs are NOT the high margin items you seem to think. They are in fact the lowest margin items in store, next to MP3 players and video game consoles. The reason BB keep CD/DVD is to attract people to their stores to buy the small items, and hopefully also sell them other, bigger items.

          • @werk says:

            @Chris3000: Damn straight Chris, getz76 couldn’t be more wrong if he tried.

            Even more to the point Best Buy LOSES money on most new releases, they are used to drive foot traffic to the store, not make money. Getz this is a real business strategy and if Best Buy followed yours they would be closing as well. It is the same reason Target and Wal-mart now have grocery stores. They are a great traffic driver but are low margin producers.

            Wal*Mart/Sam’s Club/Costco/Target will always beat Best Buy on Price. But know what? So will the internet. That is why Best Buy chooses it’s price battles carefully and works at having a better product assortment, more pleasing shopping environment, and they *try* to have better service. If I want a 50 inch flat panel EDTV PanaFonic brand TV for $300 I would go to Wal-mart. Or if I wanted a great tv, like a Pioneer Kuro well I sure as hell can’t get that at any of the store you listed, so I would go to Best Buy.

            People who want cheap crap do not go to Best Buy. But sometimes people want better products over lowest possible price. AV Accessories? I’ll buy them on the internet, not Best Buy, not Wal-mart. If I want a great TV I want to go see picture quality in person and know that I am looking at the top brands and their top model lines, I will go to Best Buy. Until we virtual reality shopping there are some products I will shop for in person and many of them will be at Best Buy.

            Electronic retailers can not win the low price game against the internet. Best Buy didn’t try. Circuit City did.

        • Anonymous says:

          @getz76: I don’t know where you got cd/dvds being “High Margin” cuz us at Bestbuy lose money on those everyday. Plus in the south, we are part of a test where every cd is $9.99, even new releases which loses us even more money.

    • dangermike says:

      @Uh oh… Cleveland: I think it’s a pretty similar story as to what happened to the Good Guys. I had a buddy pick up some summer work there a few years ago as an hourly sales associate as the commissioned sales reps were getting phased out. From what I heard, commissions pushed wages up to 40-60k/yr typically, and sometimes as high as 80 for the guys that really knew how to drive sales, and some were in their 30′s and 40′s and making a modest career out of sales. The hourly employees that replaced them were paid 12-17/hr and were all high school-to-college aged (at the time, my friend was the oldest at 24, and was just working for the one while he worked on his master’s degree). The hourly employees didn’t know the products very well, didn’t care to learn too much, didn’t push for sales, and basically did only as much as told. And Good Guys went good-bye within about 2 years.

      • Barney_The Plug_ Frank says:

        @dangermike: The only problem with commission employees is that once you step foot in the store, you feel like bait as they try up sale you to something you were never intending to buy. Stores like CC would use bait products, products priced well, to get you in the store, then try to up sale you to another product (with higher margin) and then hit you with a worthless extended service policy. “squeeze and cheese them.”

    • Navin R Johnson says:

      @Uh oh… Cleveland: It’s the nature of retail. All retail stores eventually succumb to it. It will happen to Best Buy too some day.

    • ElPasoAgresso says:

      @Uh oh… Cleveland:

      There is some evidence to the WalMart killed CC thread.

      Business Week Article April 2007

  2. Bahnburner says:

    I heard it’s more fun if you raise your hands in the air…

    • OggJoshua says:

      @Bahnburner: But I don’t wish to imply that I just don’t care.

      • novacthall says:

        @OggJoshua: You are only allowed that course of action provided you wave your hands.

        • Con Seannery says:

          @novacthall: @blackmage439: When they dropped the good employees, that was the final event in the snowball of disaster. Everything after that was just clawing at thin air. Disasters don’t have a single cause, it’s a chain of events. Circuit City could have broken that chain many times, but just opted for a band-aid on their wounds. Here is the blood loss taking effect.

  3. Swifty says:

    Maybe Circuit City should fire all of their executives and hire lower-paid replacements.

  4. Cameraman says:

    Can stockholders sue the CEO for malpractice?

    I hope everyone learns from this: you can only cut your services so far until the customers go somewhere else. I’m looking at you, airlines.

    • SKURRY says:

      @Cameraman: Going elsewhere implies there is alternative competitition. Considering all airlines (with the exception of SW) are following in suit and I’m not about to hop on a train to Europe… we are screwed.

      • Cameraman says:

        @SKURRY: Ouch. Touche.

        • Con Seannery says:

          @SKURRY: I’ve long held that to be the problem. When all of your competitors are colluding with you to charge the same, cut service the same, and hide the same fees, you stop having real competition. And you start loving your huge lobby that keeps the government from crashing the party.

    • gattsuru says:

      @Cameraman: Most upper management employees (and community representatives) are legally responsible to the stockholders. It’s difficult to prove a lot of liability, but it’s not hard to sue.

    • Shallots says:

      @Cameraman: As a matter of fact, “two individual shareholders sued Viacom in 2005, accusing the media company’s directors of breaching their fiduciary duty in approving nearly $160 million in compensation to three executives: Redstone, current CBS CEO Leslie Moonves and former Viacom chief Tom Freston, in 2004 — a year when the company reported an $18 billion loss.” (Daily Variety 3/14/07)

    • Beerad says:

      @Cameraman: The answer is yes, stockholders sue executives all the time, usually in a derivative lawsuit (so-called because the stockholder is suing “on behalf of” the company itself (on the theory that the company should be suing the CEO or whoever but isn’t)).

      The problem is that most business decisions, even boneheaded ones, are protected if it can be shown that it was a legitimate business decision by management.

    • MightyDwarf56 says:

      @Cameraman: But the government will bail out the airlines again, they won’t be as kind to CC.

    • Anonymous says:

      Well – lousy service is happening same everywhere. Low cost = no service. Go to Walsmart and ask any Associate about an item for sale and you’ll get that blank stare into the distance! The management gets a bonus while asking frontline employees for wage concession and such. time and again the hourly guys gets shafted and become more disenchanted and demoralized. Maybe those bonuses to managers should instead go to the guys on the floor to improve morale / service.

  5. Murph1908 says:

    You could go back to March 2002 when they did their first employee-screw. That’s when they took all commissioned employees and made them hourly, at about the rate of what the average salesperson was making. This caused the good salespeople, who were going to make less, to quit, leaving them with the average and less than average.

    • OULAXER11 says:

      @Murph1908: How about… they get rid of “salesmen” and hire knowledgeable people who help you buy what you want and need?

      • Traveshamockery says:

        @OULAXER11: That’s what they tried to do when they got rid of commissioned salesfolk. See how that turned out?

        There’s nothing wrong with people making a commission. It’s a great way to motivate people. Hourly folks are disinterested because, well, they’re not interested in helping you because they get paid whether they do or not.

        • Sparkstalker says:

          @InfiniTrent: Exactly. Good commissioned salespeople are the best asset a company can have. They pay attention to the customer and help them find what’s best for them, not necessarily the most expensive items…because they know that returning customers are the most profitable.

          On the other hand, bad commissioned salespeople are the worst. They’ll stop at nothing to sell only the most expensive items, and will ignore customers who they don’t think will make them money. I used to work with a guy like this at the Shack…he was one of my favorites. Because he drove lots of customers my way.

    • thetunecatt says:

      @Murph1908: Actually let me clarify what they did. I worked for Circuit City when they did this. They took the employees who were making over $20 per hour average on commission and laid them off. Then they took the people who made under $20/hr on average and paid them what their average was. For the rest of us we were already on a non-commission basis so there were no changes.

      • Oranges w/ Cheese says:

        @thetunecatt: That’s the BEST IDEA EVER! “You’re our best salesman – you’re fired.”

      • Murph1908 says:

        @thetunecatt:

        I had left CC about 2 months prior to this. My best friend was a manager. A couple of my friends were part of the $20+ an hour crowd.

        It has been 6 years, so I didn’t remember the exact scenario. Thanks for the clarification.

        My funniest experience working for CC was the Black Friday prior to that layoff. Me, as one of the newest employees, was assigned to a register in a less-desirable part of the store. My register was by the mini systems, which were going the way of the dodo by then.

        We were still getting paid commissions, but all we were doing that day is ringing up sales of cheap crap from the long lines of bargain hunters.

        Up comes a young couple to my out-of-the way register. “We’d like to buy a big screen TV. Can you help us?”
        “Um. Sure, but I won’t be able to answer too many questions today.”
        “That’s ok. We know which one we want. Here’s the model number.”

        Punch it in, ring it up, and make a fat commission. Then, back to my 50 cent commissions on APEX dvd players.

  6. jdmba says:

    I am sure people would like to blame their staffing change. Perhaps that how revisionist history may play out.

    I see the staffing change as an attempt (albeit an ultimately unsuccessful one) to forestall this very happenstance.

    Brick and Mortar stores simply cannot compete with the “no sales tax” and “free shipping” internet age. Brick and Mortar can only cater to those who (1) need an immediate gratification or (2) do not have the means to purchase over the internet. #1 is a very delicate balance as to price sensitivity, and can’t sustain a huge chain. #2 tends to be of a certain income range and DEFINITELY cannot sustain a huge chain.

    The internet got them … but blame the re-staffing if you want.

    • Dave-Farquhar says:

      @jdmba: But if it’s impossible to compete with online shopping, why is Best Buy doing OK?

      It used to be the difference between the two stores was Best Buy had (mosly) clueless employees who weren’t paid on commission and made fast-food wages, while Circuit City had more knowledgeable employees who worked on commission and made more, but also applied more pressure. And if you walked in and looked like you don’t have much money to spend, good luck getting any help. CC got rid of that distinction, but then away went the only advantage they had.

      When I worked at BB in 1994-95, I won virtually any sales contest the store did. I wasn’t a good salesman, but I knew my product inside and out. People sensed that, and they’d buy from me, solely because I was knowledgeable and honest. But as soon as I found a job that paid me $8/hour, I walked away and never looked back.

      • SKURRY says:

        @Dave-Farquhar: I was going to mention Best Buy as well. They will be around for a while, although I know most here hate them, I buy from them often. Sometimes shipping an item can cost more the frieght stores build in to the price, and even if you get free shipping, its not free.

        You can still get good deals at “brick and mortor” stores, Best Buy is good for music and movies on sale, Micro Center is good for computer stuff, usually beating out even ebay.

    • ThinkerTDM says:

      @jdmba: Why did the internet get them? Sure, buying stuff over the internet is a no brainer when compared to paying for lazy employees, rent on huge stores, and keeping salesmen to make you buy stuff you don’t need.
      It is possible to compete with the internet.

    • IrvCrapper says:

      @jdmba: Immediate gratification – it’s the only reason I enter into these stores because I know that I will ALWAYS get a better deal on the internet.

      However, if there is something that needs servicing, I buy it at a brick and morter because there is a PLACE I can go back to, holding people accountable.

      If I can’t trust the shitty staff back at the brick and mortar, I don’t buy there in the first place.

      I usually buy shit like this at Sears. Their staff sucks eggs and their management functions like it’s a McDonalds, but there is a corporate reputation established on backing up the shit that’s sold.

      Sure, there are problems with Sears, but this is my decision making and rationale.

    • Segador says:

      @jdmba: I, for one, prefer to shop in a “brick and mortar” store, where I can ask questions, see the item, and take it back if it’s broken. Sadly, all these areas (Customer Service) are where Circuit City began to fail.

    • dwhuntley says:

      @jdmba:
      The internet may have helped, but remember, CC also sold product online, with a better portal I might add. It had a customer rating system that was pretty cool. I use to buy from them. I agree to a point. I think increase competition by internet stores helped, but business damning business practices ultimately lead to there downfall.

    • blackmage439 says:

      @jdmba: I have mixed feelings about this argument. I have found multiple items over the past year at Best Buy that were cheaper than any Internet offerings. The trick is to order from the website; even with in-store pickup the Web-only prices are still valid. This serves an added bonus of avoiding the sales drones. With in-store pickup, you also avoid shipping, which is a bane on even some smaller items.

      My local BB is fairly close. It requires less than half a gallon of gas for a round trip, making the cost less than shipping, but this isn’t applicable for all parties.

    • Yogambo says:

      @jdmba: Having worked as a ‘commission’ salesperson in the 90′s, I think there are arguments to be made all around. The second ‘experienced’ staffer cut was a mistake but not the death knell. Back in the 90′s CC touted how it didn’t own any property, how it leased all of its stores and how this was a much smarter business decision than what was happening with BestBuy. But my understanding is that the leases were killing them in the end. They were trying to cut everywhere they could – not necessarily cutting experience but certainly costs with the ‘experienced staff’ cuts. They couldn’t cut those leases, at least not until now. Although I think commissioned sales really was the way to go, the market for that kind of assistance is just gone. Now, it’s so easy to learn all that a commissioned salesperson knows and then you can get it for a cheaper price. It was only a matter of time before salespeople were going to become cashiers. I think that the leasing of properties combined with Wal-Marts 800-pound gorilla entry into LCD sales drove CC into the dirt. When the Mart could tell manufacturers ‘we want this’ and they had to listen, when they could cut margins below cost for all the other big boxers, CC was not ready for such a challenge. With the leases and the high executive compensation, they were a sitting duck. Bye-bye CC. It’s the end of an era.

      • Con Seannery says:

        @Yogambo: I think you are right. They built a CE empire, had all the advantages in the world, and then sat on their laurels. Their “dont own anything” approach was great, until the market went south and their stuck with no assets and rising interest. They fired the good employees as a result to save money and buy time, it didn’t work. When Wal-Mart came to town, and the internet got big right around then for this market, they couldn’t take the one-two market punch, and they collapsed. Best Buy is a survivable business, though, at least for now.

    • narf says:

      @jdmba: The internet got them in that it was so much easier to share the horror stories.

      While internet retailers have a big cost/overhead advantage, the ability to see/touch/feel a product in person and to have someone help out with the said product, still has its advantages, hence why even those with the ability to order through the internet still opts for a B&M store for their purchase instead.

      Eliminate the help, though, and the only advantage is is the ability to see/touch/feel the product. Hey, if you can’t help me spend money here, I’ll just go elsewhere … and that is why CC is dead.

    • Coyote says:

      @IrvCrapper: If you look at the 10yr trend you can see they were actually improving their stock. It was nowhere near as high as the 50+ they had in ’00 but there was a marked increase. Granted this happened when all stocks were falling but CC could have chosen better actions that would have kept them afloat instead of cutting of their own knees.

  7. Moosehawk says:

    Brilliant timeline. I love it.

    Btw, nice tag for the story. Circuit city death watch? Also brilliant.

  8. piratebull says:

    I think you should add when they decided to stop sellin appliances and when they decided to law off commission workers and switched everybody to hourly.. That was their down fall

  9. penuspenuspenus says:

    I would look at the Blockbuster withdraws and the $164million loss dates. Something didn’t come out right. 6/20 before 6/01.

  10. IrvCrapper says:

    Pull the graph out to the left more. You make it seem like the decline began with the firing.

    You are begging the question.

    • Coles_Law says:

      @IrvCrapper: Right. One could argue the transition from commission to hourly staff was the beginning of the end.

      On a side note, kudos for proper use of “begging the question”.

  11. dwhuntley says:

    I think the downfall was directly linked to the employee fireing and here’s why. CC had a great deal of high end merchandise. More so than your average Best Buy or Fry’s. With that business model you pretty much HAD to have knowledgeable staff in order to sell the highend stuff. Not only could such and experienced staff sell the highend stuff, they knew how to up sell the high margin accessories. That and extended warenties were there whole business plan. When the went to cheap labor, they thought they could do business as usual but with no incentive to sell, why would they. As a result they took a nose dive. CC living legacy will go on in economics and buisness text books on what not to do.

  12. Sir Winston Thriller says:

    Looks like the executive retention bonus plan was money well spent!

  13. JustThatGuy3 says:

    In regards to the layoffs, they likely found what WalMart has as well – there was little to no correlation between seniority (which translated into pay) and selling. Dumping the commissioned structure was probably a mistake in hindsight, but at the time, Best Buy was making a big marketing push around the fact that they _didn’t_ have commissioned salespeople (i.e. less pressure).

  14. jeffs3rd says:

    I was looking at this graph last week. It’s pretty scary how they have fallen so fast.

    Wonder if they will shift their plans from closing 155 stores to closing more.

  15. albear says:

    Wow, check this poor sucker out. I hear CC gift cards no longer have value.

    [cgi.ebay.com]

  16. superberg says:

    That’s a convenient place to start, but I think their problems began before all that. In the suburbs of Chicago, I’ve seen two Circuit City stores fail even before the current Niles Store closing.

    For better or worse, this has been a long time coming.

  17. Anonymous says:

    Circuit City has been searching for an identity for years, so no surprise here. Best Buy totally took their market share as their executives shot off short term fixes (i.e. firing experienced staff, new marketing programs) instead of figuring out their niche in the marketplace.

  18. AnonymousFinger says:

    jdmba Says:
    “Brick and Mortar stores simply cannot compete with the “no sales tax” and “free shipping” internet age.”

    Hmm… I guess that’s why Best Buy is doing so poorly too. /Sarcasm

    • downwithmonstercable says:

      @AnonymousFinger: He’s got a point though. Sooooooo much less overhead. They’ve got higher margins at lower prices than brick and mortar stores. They can cut prices to try and compete, but they’re only hurting themselves by eroding profit margins.

  19. jpdanzig says:

    I’m sorry to say that the CC in NYC’s Union Square has sucked since the time of the old employees.

    It’s the only store in the city where NONE of the media titles have ever been alphabetized so someone could actually find a title of interest.

    Poor prices. Poor selection. Poor service.

    Good riddance.

  20. oldtaku says:

    Another bit I’d like to see in this timeline – where those bitches at Circuit City specifically targeted Egghead Software and drove them out of business.

    Yes, I held that grudge a long time. Now die, die, die.

    • Ass_Cobra says:

      @sarusa:

      I loved Egghead software. It was like going to record stores for kids that grew up with computers in the late 80′s/early 90′s.

  21. ShadowFalls says:

    Yeah, it pretty much was a downhill bad management process. First, let us get rid of commission based sales so now employees have no motive to sell more. Then, lets get rid of the higher paid knowledgeable employees to replace them with lower paid employees who don’t know anything about what they are selling.

    Couple that with messy stores, uncompetitive prices, and the almost inability to get service when you need it, and you got your losses.

  22. DHT says:

    Karma for the original DIVX (The pay-per-view DVD format they created back in 1997-99). Before that I considered them “Circus City”, but after trying to kill DVD, they became “Circus Sh—y.”

    Good riddance.

    • Serolf Divad says:

      @DHT:

      Amen!

      Actually, this does remind us how much the mighty have fallen. At one point CC was significant enough a player in the electronics world that they thought they could launch their own media standard.

  23. lifestar says:

    CC definitely has been hurting, but it’s now more of a tech. monopoly in the MA area for Best Buy. CompUSA went under and now CC, which only leaves tech gear buying to Best Buy and the only Microcenter in the state.

    CC may not have been all that great, but geez, BB is worst than that!!!

  24. Blueskylaw says:

    It seems that their stock is not being traded after declaring bankruptcy.

    c’est la vie

  25. Jrsy is the dude, playin' the dude, disguised as another dude says:

    So fire all of your hard working, already trained high paid employees and give bonuses to upper management.

    I think someone mixed up their copies of Play To Win and Play To Fail….

    • econobiker says:

      @Jrsy is the dude, playin’ the dude, disguised as another du…: No, this is a Dilbertesque principal or something like that…

      A big bonus to the guy who saved all the money by getting rid of the over paid deadwood (who actually sold stuff for the company)… The action made the numbers look good for that quarter… So what if it kills the company in the long run, that guy had probably moved on soon after to run a mortgage company, or selling derivatives or something else…

      • Jrsy is the dude, playin' the dude, disguised as another dude says:

        @econobiker: Or off on some distant exotic island enjoying those drinks with the little umbrellas in them..

  26. Anonymous says:

    Remember when Circuit City was a favorite in “Good to Great” by Jim Collins? Remember when we thought being big gave you clout with customers and vendors to produce long-term returns (Michael Porter’s 5 Forces Model)? It’s time we recognize that the old approach to management doesn’t work in a rapidly shifting competitive world. There are winners in today’s market, but they follow a different approach. Read more at http://www.ThePhoenixPrinciple.com

  27. EBone says:

    I’ll go back further in time ans say the downfall started when CC stopped selling appliances and decided to become a “media” electronics store focusing on home entertainment and computers, neither of which it did well.

    • MrEvil says:

      @EBone: y’know what makes that an even more bone-headed move? Circuit City got out of the Appliance biz at a time when they were 2nd only to Sears in appliance sales. Once Circuit City got out of the game it was left up to Best Buy, Lowe’s and Home Depot to battle it out for the rest of the top four. Though I think Sears has even been de-throned.

      I don’t understand why a company would push to get out of a market they are actually doing WELL in. Boggles my mind. Boggled the mind of my old department manager at Lowe’s (who got promoted to appliances manager)

      • EBone says:

        @MrEvil: Which reminds me of how GM left the V8 large-car rear wheel drive market. GM dominated the fleet sales to law enforcement and taxi companies throughout the United States and Canada, and then bailed on the market. Now every police car and most taxis are Ford Crown Victorias. How do you bail out of a market share like that?

  28. jackal676 says:

    I worked at a Circuit City in PA from 08/05 to 08/06. The biggest downfall that I saw was in pressuring employees too much with numbers. The big plus in cutting commissioned workers was supposedly that sales wouldn’t be so high-pressure anymore. Things were supposed to be more customer oriented, and for a while, they were. But then managers started turning the screws on their employees pushing for big sales to secure fat bonus checks. Eventually, the commission-based sale structure was readopted (with pressure on employees to sell sell sell, which translated into customers having to deal with pushy salespeople again), but now the bonuses went to worthless managers instead of the salespeople who really earned them.

    And I can tell you from experience, working your ass off being forced to push ridiculous warranties and overpriced accessories onto people who don’t want them just to keep your pushy asshole manager (who will have a much nicer Christmas, thanks to your hard work) off your back doesn’t breed much loyalty or job satisfaction.

  29. mrbofus says:

    Did the Blockbuster withdrawal come before or after the $164.8 million loss? The timeline’s dates and placements are inconsistent for those two events…

  30. Anonymous says:

    CC built a brand new store less than a month ago near me. It went from…”Grand Opening” to “Peace out, we made a bad decision and are going to go away now” three weeks later. What executive made that brilliant decision? There’s a million well spent.

    Oh, and has anyone noticed that the 10% off is 10% off of a marked up price? Do some price shopping. CC is being sneaky.

  31. syrian_gamer says:

    What will become of “The Source” by Circuit City? i have a “The Source” store that replaced radio shack, will those close down as well? if so im off shopping :P

  32. Con Seannery says:

    If they come back, they’ll be one of those ghosts of a store that is still there, but you never notice, and nobody shops at. Like K-Mart and Sears, Circuit City will live on somehow, but will get no sales.

  33. Rocktober says:

    I hate to see the good employees lose their job, and yet at the same time I’m almost glad CC tumbled. As much as Best Buy seems to have a bad rap on here, I’ve never had the problems with them that I’ve had at CC (namely: wandering around looking for someone to ring up my purchase, and if I do find someone they decide to deal with something that takes 30-min to resolve instead of just getting my single purchase out of the way first).

    The only reason I even bothered going in their store was to see if they happened to have a game that Best Buy didn’t have. Their store, while clean and easily navigable (probably because nobody bought anything), had the laziest employees I’ve ever seen and I finally decided to just take my business elsewhere.

  34. Dillenger69 says:
  35. CSUSam says:

    I would still challenge any of you who think you know more about the product I sell than me to ask me something I don’t know. I know not every store is the same, but the one I work at has some very helpful, knowledgable employees. Circuit City is failing because a CEO made bad move after bad move, and that did trickle down to a lot of stores, including some I have shopped at. There are many problems with the way things were handled and changed, but to see how many of you are happy that so many people have already lost their jobs, and many more may, in these times makes you worse than any crappy retail employee ever was.

  36. Anonymous says:

    I openly speculate that the service depends a lot on the region. Service in L.A. area stores is predictably pathetic, as is their ability to keep adequate stock (How I have tried to make purchases there.) But in my hometown of Rochester, NY, the staff is largely willing and competent, which is true to the city’s reputation at-large.

  37. Anonymous says:

    The one piece of the downfall that I keep hoping to see mentioned is Mail-In Rebates.

    I think that was one of the major factors that killed CompUSA, and it’s the same way at CircuitCity. I hate rebates, and I think most consumers feel the same way I do. I could be wrong, but I honestly would rather pay a little more and not have to play the “beg for my money back” game with the MIR fulfillment house.

    Interestingly to me, Best Buy seems like they got rid of Mail-In Rebates almost completely about the time that they started to out-pace CompUSA and CircuitCity. I’ve gone into the latter two numerous times, figured out that everything I wanted to look at had a rebate attached, and walked out.

    Given that the stores are often very close to each other in the ‘burbs, would you choose a product with a Rebate? Or, would you spend $1 to $5 more not to go through the hassle.

    In my opinion, this might be one of the largest nails in CircuitCity’s coffin.

    –Adam B.

  38. jchabotte says:

    anyone else picture it as this?

  39. jca says:

    Agree with the previous poster that their DIVX disposable DVD fiasco was a sign of things to come.

  40. Skankingmike says:

    I think they need to go back to 2003 ish 2004 when they went from commission to strick retail, removing the sales aspect and basicly the first massive firing of qualified sales people.

  41. sicem says:

    Hopefully these financial troubles won’t hit the good guys at Buy More.

  42. kenblakely says:

    Couldn’t have happened to a better company….

  43. Trai_Dep says:

    Meg, missing in the CC timeline is where Circuit City came up as a finalist in Consumerist’s Worst Company of the Year contest. The beginning of the end, if you ask me…

  44. Anonymous says:

    I was one of the employees who survived the “great purge of Feb. 2003″. The folks who were fired in March of ’07 were actually those of us who survived that first firing.

    Circuit City deserves to crash and burn. They’ve been screwing the pooch since ’02. Good riddance.

  45. Anonymous says:

    I would point to the removal to ACE (consumer electronics) and Appliances as departments. Both had higher margins than the Home Entertainment and Computer sections they enhanced.

    Consumer electronics have sneaked back in to a small degree.

  46. cbcowan says:

    Graph is completely off base. Can be tracked back to 2 things – 1. Decision 5 years ago to not reinvest in store 2. Best Buy rolling out stores with new formats while spending on its employees

    Crushed them.

  47. Anonymous says:

    I’m not suprised their bankrupt. I bought a tv with the extended warranty($400) bucks. My tv broke 3 weeks ago and its still not fixed. When I called the circuit city consumer affairs the rep said “well don’t you have another tv in your home”. I’ve spent alot of money at circuit ciy over the years and even though the stores around me are staying open they lost a loyal customer.

  48. Anonymous says:

    I worked in retail/service all through college and a little beyond. I can say one thing was common, the companies that aren’t here today were the ones that cut payroll first. As soon as you cut service and think you can run a store with a manager and one employee you might as well cut your losses and close the doors. No one is going to come back if you can’t find a person to ask questions, much less ring up your purchase.

  49. Anonymous says:

    Online retailers really are killing standard brick and mortar stores. I am a Circuit City employee. Last week a customer came in looking for an $800 GPS that we do not carry in our store. The item was available on our website for $170, so I offered to help order it for her online. When she realized that she had to pay tax, she opted out.

    It never ceases to amaze me when people complain about the mounting governmental debt and then do whatever possible to avoid paying taxes.

  50. deadpanwalking says:

    October 2008: screws mike in gears of war 2 deal, mike yun vows revenge

    November 2008: mike gets revenge.

  51. Agent Cow3.14 says:

    I have a request to do a similar graph of GM! Starting with the death of the electric car. Even though GM hasn’t filed…yet, we can do that half as predictions.

  52. parrotuya says:

    I worked at Foleys, Dillards, and Best Buy years ago. Customers know only on word: cheap, cheap, cheap, cheap! Benefits are poor and you have to work weekends. Bye bye Circuit City. Retail sucks!

  53. Anonymous says:

    I knew this was coming when during last christmas break I attemted to buy at CC web site and pick up at the store, only to find their where out of the things I had paid for online. It got me a $24 certificate, and I went to the next closest store to get my stuff. Same thing happen there..another $24 certificate. By the end I finaly got my stuff AND had enough certificate to ofset my cost… The guy/girl behind the web ordering interface (lack of) and the inventory software might be a significant root cause for the losses.

  54. Alessar says:

    I do think the employee firing had an impact, but mostly from a publicity/image angle. I simply couldn’t stand to shop at such a sleazy store anymore, so I just stopped. My friends all did the same, they just lost all of us. CC is a *lot* closer to my apartment than any competitor, but I just drove the extra distance or ordered on Amazon. The thing is, I used to do a lot of browsing at CC; the one by me had a good selection of merchandise and pretty competitive prices.

  55. emanresuym says:

    It was bound to happen..that is easy to say now of course. I hope everyone that works there gets a chance to stay on as long as possible or a decent pay out, not like the BS the Mervyns employees got when they tried to take away PTO. Going into Xmas it has to be really tough. I know the CC by my house is a ghost town now.

  56. Anonymous says:

    I understand why many of you hate Circuit City…but why would you want a company that employs so many people to go out of business? It hurts competition, and it hurts a lot of REAL people in our country.