Firing those employees was the catalyst. I think that gave them a ton of bad press, and just stuck stupid teenagers in the store who didn't know a laptop from their own asses.

I'd like to see the timeline before 2007. Was it relatively stable? In other words, did they fire higher-paid workers in order to stem a drop that was already occurring, a strategy which ultimately did not work; OR, did firing these workers CAUSE the decline over the next couple years?

and the Execs that killed the company by incompetence are already at other jobs getting fat bonuses...

I stopped shopping at Circuit City after during the summer of 2007, a jackass told me that a 20 GHz Celeron processor was just as good as a 2.0 Dual core processor.

In yesterday's mail was a Discover Card promo for Circuit City...

I would have rather seen Best Buy go under. Biggest scam artists in major retail.

c'mon now, that's some very selective reporting there. the stock was actually on the decline for almost 12 months prior to the decision to layoff their workforce. you guys are making it sound like that decision is what caused all this.

don't get me wrong, laying off all those people definitely did not help, but you don't just wake up one day & say, "hey, i'm gonna can all my employees & hire new ones for 50¢/hr less & save millions. BWAHAHAHAHA!"

ok, maybe a few people do that, but that's certainly not what caused this decline...

@bilups: Here's the 5-year chart. Judge for yourself.
[finance.yahoo.com]

Anyone else remember the long-time jingle "Welcome to Circuit City, where service is state of the art"?

I never really saw that in action.

I just bought a laptop there last night. Good thing I passed on the extended warranty...lol.

@Eldritch: I think that assessment is a tad simplistic. It takes years of poor management decisions to sink a boat that big. Those decisions (coupled with the state of our economy, Internet based Tech sales, and Best buy stomping them at every turn) eventually broke the bow.

@spoco: Yeah, I got similar "advice" while shopping there for the final time. Then I went to Best Buy for the final time (didn't know that when I walked in, obviously) and had the salesman there repeatedly tell the cashier that I would be buying the extended warranty while I was simultaneously telling her I would not be doing so. Three times he tried to talk over me before I walked out, went home, and bought the item I'd been trying to buy in person online.

Way to go, brick and mortars!

Yes, because the most important thing that happened to Circuit City's business model in 2007 was the firing of expensive retail employees.

Let the record show that Circuit City is a high profile victim of the credit crisis. It overheated based on easy money in the boom period, and could not adjust quickly enough when consumers pulled back.

@Eldritch: I worked at CC for about two weeks while I was waiting for a real job. While not the worst two weeks of my life, they were the worst two weeks of employment in my life.

Scam scam scam, lie lie lie, push push push. Their service plans and in-house warranties were a joke (as they always are at these places) but if you didn't sell them you'd get disciplined and eventually fired. I had real problems with trying to get people to buy a $500 service package (which covered basically nothing at all) on a $999 laptop.

I had the same problem working for CompUSA years earlier. And we all know what happened to CompUSA.

The sooner CC is finally laid to rest, the sooner I can toast its total demise. So, hurry up and die, CC.

@HurtsSoGood: They were definitely hurting before the March 2007 date quoted for the firings, but it's not hard to believe that the firings had a lot to do with their continued decline.

@spoco: I'd like to have that 20GHz Celeron. That is, you know, pretty amazingly fast.

Sad really for CC, sadder for the consumer that BB will be one of the only available stores in the area to shop for electronics.

I used to love going to CC over BB, but the last two years CC has been more of a test new electronics store. I'd go in, buy a new Blu-ray player, try it at home, decide that I want to keep it, but want it at a cheaper price. Go to Amazon etc... return CC one, enjoy Amazon one at cheaper price.

I guess I'm one of those who contributed to their downfall. :P

Laying off the workforce was the beginning of the end. They took all the people that knew how things worked, got rid of 'em, and expected to make the same money. A complete disregard for the value of employee experience and local knowledge-- a poor way to run a company.

@HurtsSoGood: Wow. They obviously broke the number one rule of everything: If it ain't broke, don't fix it.

Check out the 5 year stock chart. Try finance at yahoo.com.

At least the stock was doing quite well before then, and from my personal experience, Circuit City was still pretty solid.

You can see a slight decrease before the firing of the employees, so perhaps the firings were an emergency measure to offset any losses. I donno. But it can't be solely blamed on that. Can it?

@kathyl: Yeah, there are only two advantages to brick and mortars over online: customer service and immediate gratification. More and more people are willing to forgo the latter when they realize that the former is not offered in most big box stores, especially when they can get a better price and a wider selection online already.

Anyway, FARK is reporting that CC has just gone tits-up.
[forums.fark.com]

The timeline shows 6/20 occurring before 6/1.

It's a nasty blow to the local (Richmond VA) workforce; I know several people who will be affected. Still, the attempt at reinvention was too little, too late.

@cunninglinguine:
Funny enough, I've worked for CompUSA and BestBuy, and your observations are correct.
So the only warranty cramming lie factory left is BestBuy.

@ojzitro: Yes the fall started before that. The first wave of layoffs back in 2002 showed me how inept the company. This is when they went from commission to hourly. They took what you made on commission and converted it to an hourly rate. So basically if you were a good sales person you were canned. They allowed me to stay through Christmas (I was in college and worked during the summers & Christmas break) and I saw then how the plan was going to back fire. The sales people they let go built great rapport with customers so when they left, so did their regular customers. They were trying desperately to be like BB. Sometimes you just have to accept that you are #2 and do that right (i.e. Target to Walmart). The funny thing is that one of the managers they let go went to BB and hired all of those former CC employees.

For more than a year their stores have ha no inventory. They didn't even stock a line of cell phone chargers. I stopped bothering.

so who is there to compete with bestbuy now on a national level? sears? sams/costco? it's not going to be pretty.

Paying retention bonuses to keep "quality executives" from leaving a sinking ship, has that EVER worked?

@HurtsSoGood: Woah....yeah, that definitely indicates the 2007 firings was more of a cause than effect.

@AcceleratedDragon: My guess is that was an attempt to clean the last bits of meat off the carcass... with the $208 million loss reported the same day, they were probably getting ready for what is happening now, thinking that it was going to happen sooner.

@AcceleratedDragon: Made them rich, didn't it? I'd say in THEIR case, it definitely did some good.

Every time. The executives will take that bonus and ride the ship right down to it's grave.

They can't lose those execs- who will drill the holes to let the water out?

Everyone seems to be forgetting the massive layoffs in 2003. They did the exact same thing in 2003 as 2007. Either it didn't matter then or people don't seem to care. I left the company in 2001 but had a lot of friends working there in 2003. All the good sales people who made enough money to live were laid off. Some went to work at Best Buy for more than a 50% pay cut. That was the end of commissioned sales. All those who did not sell enough to be laidoff were converted to hourly and given raises. The 2007 layoffs were based on hourly rates that were considered "too high" but the idea was the same. Anyone who made more than the average Wal mart employee was let go.

When I worked at Circuit City everyone complained that employees were paid too much and that Best Buy, where workers made close to minimum wage and everything was bulked out, was better for shopping. Then after the second time Circuit City laidoff good employees in 2007, all of a sudden customers start complaining about lack of sales experience of Circuit employees? Interesting. I disagreed with Circuit City's move away from sales people but it WAS what so many people wanted. They did try to react to Best Buy taking over.

Maybe the second round of layoffs was one too many. I don't know. But the 2007 layoffs were not a new thing. They had a complete shift in strategy over the last 8-9 years which included getting rid of high performing workers twice. Heck, I only worked there 1 year, from 2000-2001, and the entire corporate philosophy changed and the store was completely remodeled 3 times ( to reflect the changes in philosophy) in that time period.

Who else had to read "Good to Great" in Business School?

Consumer eletronics have become a commodity. Do you need a sales associate to help you buy a loaf of bread? The sals associate could then sell you a warranty to cover staleness or an expensive knife to cut your sandwich in half.

Circuit City Execs have always been money hungry. They rolled out "ABW" (A Better Way) back in the 90's, which meant their commissioned sales people made 1/4 as much on product as before. That's when the knowledge started leaving...the switch to cheaper labor in 07 was a continuation of their myopic view of making money at the expense of employees and ultimately customers. What else did the execs expect when they treat people as numbers to be manipulated...Organizations are made up of people and supported by consumers, also people. You can't screw people and expect your business to grow.

@lifestar: I did a similar thing once, and I don't feel a bit of guilt. Needed a new HDD right away, Newegg had it for $60, CC for $130. I bought it at CC, went home and fixed my horrible computer issue, then ordered the very same model from Newegg. When it arrived a couple days later, I returned the Newegg drive to CC and got a refund. Had CC sold it for a reasonable price (say, $80), I wouldn't have done that, but for more than double an online price?? No way. RIP, CC. I won't miss you except for the hands-on time I occasionally get with products I then buy elsewhere.

@ADismalScience: Oh you and your fancypants college-boy analysis. It was the fatcats which done it, and they done it because they wanted to screw the little guy. C'mon, it's right there on the chart!

@andystep12: I wonder how long they will stick around? Will they collapse, due to a failed business model? Will they thrive, because some people just want a warranty cramming lie factory, and they no longer have competition in that market?

@cunninglinguine:

I imagine a 20 GHz Celeron might be faster that a 2.0 Dual Core. But what would I know? I'm not a jackass.

@bilups: The way it looked from that chart, around the time they made the switch from commission to hourly, they lost a bit a stock value. But they slowly got it back to what it was before the 2007 firings. Odd to say the least. But this doesn't tell the whole story. There had to be a reason for the drastic measures that we don't know about. But, what ever the reason, it didn't work.

@lifestar: Sad for Richmond, VA too. I know many people who've worked at Circuit City over the past few years, and several of them are now going to be on the unemployment line. Along with laid-off employees of Genworth, LandAmerica, Wachovia Securities, and others, not to mention the vendors and other related businesses. Uncertain times, indeed.

@HurtsSoGood: and the site you're looking at now reported it 43 minutes before your post...11 minutes before this thread was started

@bilups: Yeah, Consumerist should show the 5 year plot. That Even makes their point more outstanding.

@KhaiJB: Thats the thing that always pisses me off about these things. It's always the little guy that gets it the worst.

@mac-phisto:

Actually look at the 5-year chart before you say something wrong...

I think this year is going to send a message to the B&M Retailers (the ones that are still standing when the smoke clears) that they can no longer ignore online only vendors as competition.

I am afraid this timeline does not go back far enough. I worked for CC in the late 90's. The fall started when CC stopped selling major appliances causing CC stock to go from $60 to $21. It was a slow downward spiral from there. CC was #2 appliance retailer, only behind Sears. They instead wanted to fill the showroom full of overpriced PDA's and Headphones. Sad to see them go, but it was the worst job I have ever had and the company arrogance was nauseating.

@shadax: This may be the first time that I've ever heard someone think that Circuit City is better than Best Buy--maybe it's just your local one that stinks. Even the worst BB I've been in is better than the best CC.