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Circuit City Closes Its Doors For Good
Posted by
ScuttleMonkey
on Fri Jan 16, 2009 04:19 PM
from the gonna-have-a-heart-attack-and-die-from-not-surprise dept.
from the gonna-have-a-heart-attack-and-die-from-not-surprise dept.
bsharma is amongst the hordes of people wanting us to share the news that long beleaguered retailer Circuit City has finally decided to close for good, asking for court approval to close the remaining 567 US stores. "Whalin said management mistakes over the past few years combined with the recession brought down Circuit City. 'This company made massive mistakes,' he said, citing a decision to get rid of sales people and other mismanagement. What's more, given the credit market freeze, Whalin added that no manufacturer wants to sell to any retailer who doesn't have money to pay for the merchandise. At the same time, Whalin said there's still a very slim chance that one or more firms that have expressed an interest in buying Circuit City could still buy it out of bankruptcy over the next few days."
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Circuit City Returns Under Systemax 134 comments
animeking503 was one of several readers to send word that after closing its doors earlier this year, CircuitCity.com is alive and kicking once again. Systemax Inc., the company that owns TigerDirect and CompUSA, purchased the Circuit City e-commerce brand name last month, and has now re-launched the website with promises of lower prices and better service. The Consumerist points out that the new site's return policies leave something to be desired.
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Main mistake they made? (Score:5, Interesting)
Only matching a competitor's price (and not beating the price) meant they were basically forcing their customers to do their job, i.e. price shop their competition. If I find two stores selling the same item, and one store is less than the other, I'm going to the lower priced store. The only time I'd consider going to the higher priced store would be if they gave me a price LOWER than their competitor. A price match is meaningless.
Maybe they changed their policy in later years (after I stopped visiting their stores), I don't know, but the negative perception I developed about them persists to this day. And now they're gone. I wonder if they learned anything?
Re:Main mistake they made? (Score:5, Interesting)
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Re:Main mistake they made? (Score:5, Interesting)
* Best Buy -- Be told that there are 6 of the item remaining in stock, but... uh... "We can't seem to find them. No, we don't do rainchecks, why do you ask?".
* Circuit City -- Find the item, take it to the cashier, see it ring up at 125% of the shelf-listed price, and be told "Sorry, what the cash register says is what goes."
* Microcenter -- Find the item (no advertised sale, but a decent price nonetheless), chat with a guy for 10 minutes about the latest AMD motherboards, and check out without further issues.
Needless to say, one of these stores received the majority of my business, as well as that of the other tech-knowledgeables in the area. The other two shops are not doing quite as well.
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Re:Main mistake they made? (Score:5, Interesting)
CC would have the item but BB never would.
The reason for that was because people, like the grandparent, stopped going to Circuit City for general needs and browsing because the overall selection and availability sucked, the prices were high, and the service was crap. However, if you wanted to go in just for the loss leader (i.e. you read the circular or looked it up online and planned your trip) then you were more likely to get that one item because there were fewer casual shoppers and browsers in Circuit City to compete with you for the loss-leader items.
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Re:Main mistake they made? (Score:5, Funny)
That pretty much sums it up. The only reason to go to a Circuit City was to avoid crowds.
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Re:Main mistake they made? (Score:5, Interesting)
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Re:Main mistake they made? (Score:5, Funny)
you have Questions
we have Blank Stares . . .
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Re:Main mistake they made? (Score:5, Funny)
You have Questions
We have Batteries....
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Re:Main mistake they made? (Score:5, Funny)
You Can Get Better
But You Cant Pay More
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since when? (Score:5, Insightful)
Radioshack and (if you're on the West coast) Frys still sell niche components
I haven't seen a niche component in stock at a Radioshack in years. Unless you consider a Sprint phone to be a Niche component, anyways.
As far as I have seen, the days of going to Radioshack for circuit boards and resistors for home hobby projects are long gone.
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Re:Main mistake they made? (Score:5, Funny)
I don't go to BB or CC. I go directly to AA. Can't find what I'm looking for there, but I end up solving some problems that I didn't know I had.
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Re:Main mistake they made? (Score:5, Interesting)
From what I remember, in the late 1980s/early 1990s they'd give you 10% over the difference in price. (so if it was $100 less somewhere else, they've give you a $110 refund).
By the time I saw my first Best Buy in the DC area (mid 1990's), they had stopped doing it.
They also used to be one of the few places that actually made good on their extended warranty -- if you had to bring it in 3 times for service, you got a replacement (either same or equivalent model).
Oh well ... yet another memory of my childhood gone (Service Merchandise, Erol's, etc.)
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Re:Main mistake they made? (Score:5, Insightful)
From what I remember, in the late 1980s/early 1990s we didn't have Circuit City or Best Buy here in Chicago. The electronics stores around here were called Highland, Silo, and Omni. They all went out of business during the recession of the early 1990s. [wikipedia.org] It seems like history has repeated itself once again. Lesson learned, don't hold stock in electronics retailers during a recession.
Yeah, but electronics retailers aren't the only ones going out of business. Linens'N'Shit is closing, and I understand Chrysler and GM (hey, what about Ford?) are in deep trouble.
So I think you could generalize to say something like "Don't hold stock in a poorly run company in a crowded market." Then again, isn't that good advice in general?
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Re:Main mistake they made? (Score:5, Funny)
The worst part of Linens'n'Things closing is that I won't get to say Linens'n'Shit anymore. Now I have to come up with new ways to annoy my wife.
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Re:Main mistake they made? (Score:5, Funny)
Well there's still Blood Bath and Beyond.
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Re:Main mistake they made? (Score:5, Interesting)
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Service? (Score:5, Interesting)
If we are going to discuss this in detail, though, I would specify how you define service:
I don't care about salespeople *at all*, in fact, I would generally just like for them to leave me alone unless I ask is something is in stock, etc. I generally know what I want or can read the back of the package (or often just find the partnumber and read reviews online right there on my cellphone.) I don't expect some teenager to know nuances about RAID setup, PATA vs SATA notebook drives, or what webcam is compatible with linux, etc. After junior high I stopped asking pretty much any non-engineer/programmer/somebody-that-actually-made-the-device anything about computers, as I'm sure many of you did.
What I do care about is being friendly and helpful with logistics (delivery of the flat-screen TV) or returns / exchanges for defective parts. A few online companies are absolutely fantastic with this (Amazon, etc.), so I almost end up with everything online unless I need it immediately. FWIW, despite their adherence to retail (and rarely ABOVE-retail prices), Best Buy has always been pretty good in terms of my definition of service for me.
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Re:Main mistake they made? (Score:5, Funny)
Huh, I find that my CC has smarter and more helpful people than the local BB.
You gotta admit that's setting the bar pretty low.
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Re:Main mistake they made? (Score:5, Funny)
Don't you know? After BB and CC comes CC++++!
Will they sell HHD DVVDD BVDs there?
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Re:Main mistake they made? (Score:5, Interesting)
Me: Do you have any IDE to SATA power adapters?
Salesdroid: What?
Me: IDE to SATA power adapters?
Salesdroid: Uhm... is that like a XBox thing or something?
Me: Is there someone who works in this department I could talk to?
Salesdroid: I work in this department.
Me: ok... uhm, do you have any SATA power supplies?
Salesdroid walks me over to the UPS selection.
Salesdroid: Here are our power supplies.
Me: You know what, I think I'll just go look around on my own.
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Re:Main mistake they made? (Score:5, Interesting)
I haven't paid any attention to CE retailers and I'm not one to really go to the big box stores as a consumer too often. I do know that when I started working for CC beating a competitor's price by 10% of the difference was new in the industry and we did shop and match competitor's prices (We'd go in with hidden mics and record model prices).
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Re:Main mistake they made? (Score:5, Insightful)
People aren't afraid to spend too much money if they get good service. And that was precisely what Circuit City did. They fired all of their best, most expert sales and service staff because they cost more. They replaced these people with kids off the street and they got what they paid for.
It was bad customer experience that killed Circuit City. The bean counters thought they could improve their bottom line by lowering payroll costs but they neglected to consider that it would damage the store's reputation and drive customers away. We see this time and time again. Every time you see IT salaries fall and people start leaving the field, what is left? Do they really think they can fire skill and experience and replace it with inexperience and STILL maintain productivity, efficiency and quality of service?
At the next CEO/CFO conference, I hope this is topic for discussion -- they are destroying their businesses with short-term greed. And every time I see it happen, it is tragic... and they never learn from it.
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Re:Main mistake they made? (Score:5, Interesting)
Here in the Valley, my wife an I say that you can tell the state of the tech economy by the quality of wait-staff in restaurants... It's sort of like a trickle-down employee quality metric: as intelligent tech workers get laid off they replace less intelligent folks in other jobs, which eventually percolates down to waiters and waitresses in Dennys and such.
When the economy is really bad, you get excellent service in restaurants. When it's boom time, you get a ten-minute wait time for a seat in an empty Denny's while four sub-seventy-IQ employees stand around ignoring customers.
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Re:Main mistake they made? (Score:5, Informative)
I worked at Circuit City from 2000 to 2003, and this was not the case for us.
I cannot speak for CC nationwide, as I was in a store in the northeast, but we had a "price match plus" policy. If you found a lower price from a brick and mortar store, and you or we could verify it, we matched the price and beat it by 10% of the difference. Perhaps this was not the case before or after I was there, or in different regions.
To the best of my knowledge, prices were also identical to the competition. Every weekend a small group of us would comb through every newspaper they brought in, and would familiarize ourselves with what the competition was advertising in their flyers. We were usually the ones to announce to customers that a certain item was on a price match sale, and managers were supportive in helping us get them that lower price. We would call or go online to verify a better price if needed. Only very rarely did a customer find a lower price elsewhere and bring it to our attention.
Now, I also think this was the "best" time for customers with CC. They had come out of a DivX salesman era, which stained the companies opinions in many peoples minds. The company started to revise its checkout system, and brighten up stores, as well as introduced a completely new layout for the new stores. But it was still playing catchup to the other guys. The same poor management was running the show. Any progress here was lost with the changes to the payment structure which lost a lot of good will with loyal employees, which were later outright laid off. Then they were just slow with keeping up with the competition with Firedog, and never had the kind of HDTV showcasing that Best Buy was able to foster.
The rise of Best Buy and Walmart did the company in, with superior selection, store layout, and even colors. Seriously, Blue and White or Blue and Yellow, just flat out beat Red and Black. Our stores were dark, dated, they felt old, the store was like the weird used car salesman of electronics. While the "we don't have checkout counters" idea was an interesting experiment, it was a failed one that the company never truly fixed. A poorly run company can survive in the absence of great competition, and I think CC was floundering for the past decade. Semi-competent (at least more competent than Circuit City) competition and a recession is all it took.
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Re:Main mistake they made? (Score:5, Funny)
WalMart is a dangerous company. They can put other business out of business because they can sell for lower prices than anyone else could ever afford to do, because WalMart is so huge and is the only choice of shopping places in many parts of the country.
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More than mismanagement (Score:5, Funny)
Re:More than mismanagement (Score:5, Informative)
Agreed. I bought some memory there a while back, through their in-store pickup option. I paid for it online, drove to the store, and had to wait 30 MINUTES for them to figure out how to process my order. Without exception, every time I went in to a Circuit City, I left disgusted and vowing to avoid shopping there again.
Incidentally, now that CC is closed, that mantle is being passed on to Fry's. The reps never know anything, assuming you can actually get one to help you, and they never have to part I'm looking for. It's either not stocked anymore, or they're always sold out of it. Sure it's fun to go in there and drool at the TVs, but I'm sticking to Newegg from now on.
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sucks for the employees (Score:4, Funny)
But the management was the worst of the worst. I think there was a factory in Argentina where the union kept the shop going after the owners went bust. Too bad the 30,000 employees of Circut City that still have their souls couldn't do the same thing.
Re:sucks for the employees (Score:5, Informative)
I think there was a factory in Argentina where the union kept the shop going after the owners went bust.
Actually, there were close to 200 of them. You can learn quite a lot about it here [thetake.org], and in a couple of months, you should be able to buy my translation of The Silent Change, which is mentioned there.
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Obvious (Score:5, Funny)
But DIVX was just about to take off!
What about "The Source" in Canada? (Score:5, Interesting)
Here's a picture of one:
http://flickr.com/photos/photofinderguy/2472113998/ [flickr.com]
Re:What about "The Source" in Canada? (Score:5, Funny)
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Re:What about "The Source" in Canada? (Score:5, Funny)
The second half of the sign was above the 4GB addressable memory size.
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Re:What about "The Source" in Canada? (Score:5, Informative)
The article mentions that they'll continue to operate.
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Re:What about "The Source" in Canada? (Score:5, Funny)
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Re:What about "The Source" in Canada? (Score:5, Funny)
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What'll be interesting.. (Score:4, Interesting)
is hearing all of the stories that are going to come out of the liquidation.
I bet these employees have been holding it in for a long to come out. Now, with the store going away, they might give us a little insight to why they failed so badly.
compare and contrast with the apple stores (Score:5, Informative)
Well, I have had experience with the old school way of doing things, Beast Buy, Comp Useless, and Circuit Shitty. The advantage they had over the smaller shops is a huge selection and usually steep discounts on big ticket items. The drawback was usually that you got raped on the peripherals and accessories ($20 printer cables you could buy for $2 anyone?) and their staff was usually pig ignorant and useless. Not only that but you also had to deal with scumfuck corporate tactics on returns, were treated like a thief every time you left the stores with mandatory bag searches, etc. Ultimately I both hated these stores but knew they were the only option when I needed something today and couldn't wait for a delivery. The other problem with buying online, especially electronics, is that returns become a nightmare. If I'm buying a big ticket product, I need a place I can return it to if it's broken and I don't want to eat S&H along with 15% restocking fees.
The newer model seems to be represented by the reborn Comp Useless (purchased and owned by Tiger Direct) and the Apple Stores. In the Comp store by me, they're shucked the generalist crap and are tightly focused on computers and electronics. They carry a full range of parts and you can pick out anything you need to build your computer. The tech desks are at the front of the store and there's no walls, it's just you and them. If the people on the sales floor don't have a clue, you can go up and ask a tech and get an answer. I don't know what they're paid but they don't seem as unqualified as the Geek Squad. So far, I've not yet been disappointed but am still keeping a wary eye on them.
The nice part about the Apple store is how they're heavily staffed with people to answer questions and all the toys are out there for you to play with. The traditional big box stores leave you to find your product on your own. As a geek I can muddle along but I have no idea how Joe NotGeek can find what he needs. Apple also schedules classes, has the genius bar (yes, it is a stupid name) open for people to ask whatever questions they need, and tries to demystify computing as much as possible. I won't say they're entirely successful but they are a huge improvement over what you get at the traditional box stores which is nothing.
What it really comes down to is that some business models can be run along the lines of McDonald's and some simply can't. In the restaurant field there will be people who pay $100 for a fine steak and those who will be satisfied with a crappy burger spanked together by surly wage slaves. McDonald's has been enormously successful and will remain so, even as there's a market segment for higher quality fast food stand-in's like Panera's and Quizno's.
The big box stores were the McDonaldizing of electronics and big ticket consumer products. The funny thing is that I thought they would remain as successful as McDonald's and for the same reason. Oddly enough, it looks like the cost-cutting I took for making them profitable did away with whatever vestige of quality that kept people shopping there. It will be interesting to see if there's more of a trend towards competing on service and knowledgeable staffing. Hell, even McDonald's is trying to take a stab at entering the real food market with Chipolte.
One other factor that might also come into play is America's acceptance of cheaply manufactured disposable junk. In good times, people were content to buy a big screen that might be dead in five years because it could always be chucked for the next great thing. People didn't want reliability and durability in their cars because they were trading up every three years. When income is no longer quite so disposable, will people be willing to pay more for quality with the understanding that it costs less in the long-term?
Re:With Circuit City and CompUSA all but gone... (Score:5, Insightful)
Their own bankruptcy?
Consumers are clearly using their purchase power to go where the deals are (online). BB will be the next to go if they don't compete.
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Re:With Circuit City and CompUSA all but gone... (Score:5, Insightful)
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Re:With Circuit City and CompUSA all but gone... (Score:5, Interesting)
An aunt of mine recently decided to splurge on an HDTV. She'd looked at what was available at Best Buy, Sears, etc. and found a nice 40" Sony at Best Buy that she really liked. But she wanted to buy the tv from a local store, not a big box store, for a number of reasons. She's the kind of person who believes in "mom & pop" types of outfits. She's also a photographer and wanted to use the HDTV to view photos from her computer. We went to the local store she was interested in and found the same Sony there. The sales rep bent over backwards to help us out and answer all our questions. I was impressed when my aunt started asking about viewing photos and pulled a photo CD out of her purse. The guy ran around the store, found a DVD player, hooked it up to the tv she was interested in, and let her view the photos. Then she started noticing some of the other HDTV's there and asked if she could view the photos on any of them. So the guy figured out where the feed to all the tvs in that section was and hooked the DVD player up to it, so my aunt was able to look at her photos on a dozen different HDTVs all at the same time.
We decided to do a little more shopping around and grab some lunch before making a decision. We stopped back at the Best Buy and saw that it was selling the HDTV for something like $200 less than the local store. We went back to the local place and asked if they'd match the price. The guy ran off for a few seconds and came back and said they could but then couldn't offer us the free local delivery they typically provide. Big deal - we were planning on taking the tv with us anyway. And the local shop offers full warranty & repair service AND will come pick up the tv for free if any work needs to be done on it.
You'll NEVER get those sorts of services from places like Best Buy. My aunt was treated amazingly well throughout the experience, and the local support she'll get is top notch. If she ever has any questions/problems she can call the store and they'll help her out.
My guess is that as the economy manages to sort itself out over the next year or so you'll see a comeback in smaller individual stores, local/regional chains, etc. that provide MUCH better service. I think consumers are becoming more and more savvy when it comes to realizing that they need to think about things like after-sale service & support, and the big box stores simply don't provide that with any sense of reliability or consistency.
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Re:With Circuit City and CompUSA all but gone... (Score:5, Insightful)
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Re:With Circuit City and CompUSA all but gone... (Score:5, Insightful)
The small guys got the business. In this economy that is huge. Survival through blood, sweat, and tears is rarely "an inspiring tale", except when it is told by the survivors to their thriving descendants.
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Re:With Circuit City and CompUSA all but gone... (Score:5, Insightful)
You should have paid the $220 more at the local store. They provided the excellent service and deserve it.
Unless you want everyone to provide the same crappy service for cheap prices.
The sales guy earned it, don't you think????
If you ever wonder why you get crappy service at the big box store, it is because when price is all that matters to the customer, then having better informed (higher cost) sales reps is an expense they can't afford.
1) Price
2) Quality
3) Service
Pick any two. If you want better service, reward it.
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Re:With Circuit City and CompUSA all but gone... (Score:5, Interesting)
While I do agree with you, I'll take a moment to play Devil's advocate. Small store owners can be dicks just like the big store owners. I do a lot of grocery shopping at hole in the wall ethnic markets and the staff there can be every bit as surly as disaffected slackers in big box stores. The difference (usually) is that good performance goes unrewarded at the big box stores, actually punished at Circuit City since they fired their top salespeople. In a small shop environment, it should be possible for a good salesman to be rewarded for his efforts, therefore you would expect more positive reinforcement and better reps there.
I worked for a computer guy back in '99 as the box stores were rising in prominence. The mom and pop shops couldn't compete with the box stores on price and this guy decided to add PC hardware to his midrange business that was slowly dying off. I told him that trying to make money off of merchandise was ridiculous and that the only way a smaller shop could compete was on service. If we built a proper service department, we might have a shot at surviving. He didn't, I moved on, and from what I've heard of people who have tried running service shops catering to businesses, its a damn rough game to be in these days. Businesses will pay for lawyers and accountants to come in and help as necessary but they seem to think that computer people should be paid the same rates as the janitorial service.
Apple's first big loss to Microsoft was thinking people would pay more for mac quality but the market said Windows wasn't great but good enough. It'll be interesting to see how it goes in the future. The iPods are ridiculously overpriced as mp3 players but those bastards sell like hotcakes. I guess the bit of genius there was equating this to fashion. People will be ruthlessly efficient when it comes to making practical purchases but when it comes to buying impractical things like handbags, shoes, and designer goods, logic and reason go out the fucking window.
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Re:With Circuit City and CompUSA all but gone... (Score:5, Funny)
My wife and I had almost the same experience. Our fridge died. We went to Best Buy, Home Depot, Lowes.. Everybody said that it would take four of five days to get one delivered. We decided to check out a local place. They had a great fridge for a great price. Then came the delivery, the answer was how about tomorrow?
Ugh. I hate it when people answer a question with a question. Bastards.
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Re:With Circuit City and CompUSA all but gone... (Score:5, Interesting)
Sorry, but Wal-Mart simply isn't competitive with online retailers for electronics and computers. First, as you noted, they only stock limited items. But, if they don't have what you want, it DOES matter, because you not only wasted a trip (time and gas), but you had to deal with the hell of going to Wal-Mart and being around their annoying customers. Maybe Wal-Mart customers aren't so bad where you live, but here in Arizona, going to a Wal-Mart is not a fun experience, unless you like tripping over countless undisciplined children running amok and throngs of non-English speaking customers who walk very slowly and always insist on taking up the entire aisle, instead of staying to one side so you can get by. And good luck not having someone run into your car in the parking lot.
For clothes, housewares, and many other goods, Target is a much, much nicer and less stressful place to shop, but they don't have many computer parts.
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Re:With Circuit City and CompUSA all but gone... (Score:5, Informative)
...what's to stop Best Buy from inflating their already-borderline-ridiculous prices even further?
Target, Wallmart, Sam's Club, local retailers, amazon, newegg, froogle, etc...
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Re:With Circuit City and CompUSA all but gone... (Score:5, Insightful)
There's still Office Depot and similar stores, which you may have noticed are moving into consumer electronics to a degree (e.g., that's where I got my TV.) And, of course, the elephant in the living room: online competition. For items like TV's and stereos, most people are probably more comfortable buying something they can actually see and hear in the store -- but when it comes to, say, buying a printer or an external hard drive, there's really no reason to shop brick-and-mortar.
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Re:I'm sure everyone is wondering also... (Score:5, Insightful)
Having seen plenty of these (Sharper Image and Mervyns come to mind), those liquidations are usually disappointing. First phase: everything is 10-20% off, no better than the rotation of items on sale.
Next, you start seeing the goobers on street corners with "Circuit City Going out of Business - everything 20-40% off" signs. You go in there and anything interesting is 20% off. You buy something for 20%, no returns allowed. You end up hating the item or seeing it on sale at Target for less next week.
Now, the signs say 40-60% off. You go in and it's picked through and open box shit. You go home.
Finally, the 80% off signal. You go in to buy something, anything. The fluorescent lights, their enclosures, and a few display cases are on sale.
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