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Businesses The Almighty Buck

Circuit City Closes Its Doors For Good 587

Posted by ScuttleMonkey
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 Closes Its Doors For Good

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  • by It doesn't come easy (695416) * on Friday January 16, 2009 @05:20PM (#26488281) Journal
    The main mistake Circuit City made IMHO was that their prices were always higher than their primary competitors (Best Buy, CompUSA, etc.). They had a policy that they would match the price of any competitor; however, they wouldn't beat the competitor's price. Of course, their high pressure sales tactics didn't help either but my main gripe was their advertised prices.

    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?
    • by bdenton42 (1313735) on Friday January 16, 2009 @05:29PM (#26488479)
      My issue with them was that several times when I would go to their store to buy their advertised loss leader... they wouldn't have it. Then I would go across the street to BB and pricematch, and BB almost never seemed to have a problem with having something in stock. At some point I just stopped going to CC completely... I'm surprised they lasted as long as they did.
      • by IorDMUX (870522) <mark@zimmerman3.gmail@com> on Friday January 16, 2009 @07:25PM (#26490725) Homepage
        In my hometown, we had a Best Buy, a Circuit City, and a Microcenter within about a .25 mile radius. (Don't ask me which planning genius decided we needed that level of saturation, but at least there were advantages for the consumer.) My options, when it came to purchasing that tech-whatever-on-sale that I needed, tended to go as follows:

        * 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.
    • by megamerican (1073936) on Friday January 16, 2009 @05:30PM (#26488499)

      That pretty much sums it up. The only reason to go to a Circuit City was to avoid crowds.

    • by oneiros27 (46144) on Friday January 16, 2009 @05:32PM (#26488553) Homepage

      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.)

    • by orclevegam (940336) on Friday January 16, 2009 @05:37PM (#26488633) Journal
      Compounding their sin of higher prices they also had the singularly least helpful (or knowledgeable) staff of just about any store I've ever been to. The selection was also rather poor often missing products from major vendors. They tended to try to cram overpriced and unneeded warranty programs down your throat as well. The final insult however was almost every time I've ever been in a Circuit City some moron would be in the back with the car stereo systems cranked to max volume, the bass knob broken off on 11, and some truly horrid radio station tuned in. Simply stepping in the front door was usually an invitation to permanent hearing damage and a pounding headache for a few hours.
      • by Xtravar (725372) on Friday January 16, 2009 @05:46PM (#26488839) Homepage Journal

        Huh, I find that my CC has smarter and more helpful people than the local BB.

        Now that I've typed that, we need a competitive electronics store that can be abbreviated DD. Dick's Digitals? Digital Dungeon?

        Then we can say "Let's go to double D" and have a good laugh.

      • Service? (Score:5, Interesting)

        by neapolitan (1100101) on Friday January 16, 2009 @06:17PM (#26489509)

        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.

        • Re: (Score:3, Interesting)

          by orclevegam (940336)
          I define service as actually knowing details about the products you sale and whether you stock something or not. If I come in looking for a particular part I should be able to pull aside someone in that department as say "Do you have ____" and they should be able to tell me yes or no, and if yes show me where it is. I consider very good service being able to answer a technical question, such as if a piece comes with an adapter for something, or if it has to be purchased separately. Crap service is when they
    • by CrkHead (27176) on Friday January 16, 2009 @05:53PM (#26488995)
      I put in my time at Circuit City many years ago. Around the end of that time they had just started moving some departments from commission to hourly. I say this is the #1 reason they eventually tanked. Commisioned people are more motivated. Good commissioned people are more interested in repeat business than the immediate sale.
      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).
    • by erroneus (253617) on Friday January 16, 2009 @06:07PM (#26489263) Homepage

      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.

      • by blueZ3 (744446) on Friday January 16, 2009 @06:35PM (#26489877) Homepage

        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.

    • by Chonine (840828) on Friday January 16, 2009 @06:09PM (#26489309)

      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.

    • Re: (Score:3, Informative)

      by cdrudge (68377)

      According to their website [74.125.47.132] (google cache link while it works), they did the standard 110% of the difference that many stores do these days. I know I've priced matched a few items over the years and I think I always got the difference. 10% of the difference usually only amounted to a buck or two but it was still less.

    • Re: (Score:3, Insightful)

      by MtViewGuy (197597)

      The other thing that killed Circuit City was the fact they never got their act together when it came to selling home video software. How could they compete against Best Buy's well-organized display of home videos (originally in VHS, now in DVD and increasingly Blu-ray formats). And don't forget the original DIVX format fiasco from the late 1990's, too.

  • by SomeJoel (1061138) on Friday January 16, 2009 @05:20PM (#26488285)
    I guess the business model of high prices, unfriendly sales staff and poor quality merchandise didn't pan out for them.
    • by rudeboy1 (516023) on Friday January 16, 2009 @05:34PM (#26488587)

      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.

      • Re: (Score:3, Interesting)

        by bb5ch39t (786551)
        The Fry's that I live near is good only because it is huge. Nobody knows much of anything. And, for some reason, none of my credit cards will successfully swipe at their registers. Not even the one that was only 2 weeks old. That makes paying a real PITA. Guess that it's Web-only for me. Too bad as I like to browse.
        • Re: (Score:3, Insightful)

          by DigiShaman (671371)

          Well, that's because it's basically a retail warehouse for geeks. It always has been, and perhaps always will.

          It would be awsome if NewEgg opens a giant super store some place. Would be the motherlode of computer geekdom, don't you think?

  • by Uberbah (647458) on Friday January 16, 2009 @05:21PM (#26488309)

    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.

  • Obvious (Score:5, Funny)

    by notque (636838) on Friday January 16, 2009 @05:28PM (#26488457) Homepage Journal

    But DIVX was just about to take off!

  • by CohibaVancouver (864662) on Friday January 16, 2009 @05:29PM (#26488489)
    A few years ago, all the Radio Shacks in Canada were changed into mini "Circuit Cities," branded as "The Source - By Circuit City" - They were the same size as a Radio Shack, but under the Circuit City brand. I wonder what will happen to them...

    Here's a picture of one:

    http://flickr.com/photos/photofinderguy/2472113998/ [flickr.com]
  • Good Riddance (Score:3, Insightful)

    by Anonymous Showered (1443719) on Friday January 16, 2009 @05:30PM (#26488493)
    Here in Montreal, we have a bunch of stores that are ran by Circuit City, dubbed "The Source by Circuit City". Basically a chain with overpriced items and clueless employees. Doesn't surprise me one bit that their doors are closing, especially with the aggressive market we're in now. Has anyone seen what Dell is selling these days? Pretty much everything, and their prices are the lowest of the low*. Disclaimer: I am a Value Added Reseller (VAR) for Dell.
  • Sale !!! (Score:3, Insightful)

    by ruewan (952328) on Friday January 16, 2009 @05:32PM (#26488547)
    Sorry for staff, glad for cheap electronics. Now if only I had money.
    • by sirwired (27582)

      Liquidation sales usually suck. The Liquidator starts by marking up all items to full List price (or beyond), and then giving you a "sale" price off of that new inflated price (which nobody ever paid, and was never charged.)

      By the time the "discounts" get down to a level that can significantly beat, say, a retailer that isn't going out of business, the store has been picked clean by the uninformed masses that buy stuff, and only when they get home realize they got a lousy deal. (All Sales Final)

      OTOH, if y

  • by schwit1 (797399) on Friday January 16, 2009 @05:37PM (#26488661)
    Every industry has its version of Circuit City. Chrysler's a shining example. Screw bailing them out. They need to adapt or die.
  • by Seakip18 (1106315) on Friday January 16, 2009 @05:43PM (#26488773) Journal

    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.

  • by jollyreaper (513215) on Friday January 16, 2009 @05:50PM (#26488937)

    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?

  • by GoChickenFat (743372) on Friday January 16, 2009 @06:29PM (#26489751)

    We had one of the first wave of store closings here back in December. The "going out of business" "20-50% off", etc prices were still higher than the BB across the street. I even visited the store on the very last day where even the fixtures were on sale and everything was STILL over priced, even the fixtures. ...and why would I buy a $2k+ TV, laptop, etc from a store that wouldn't even be there the next day?

    Do yourself a favor and avoid the temptation to join the crowds of bargain hunters who think they are getting a good deal just because the tag says "30% off". What ever you're looking for will still be cheaper online or at Best Buy, Office Max, Fry's...

    Circuit City...overpriced and useless to the very end.

  • Best Buy used to be a great store but they have been in a steady decline for years, with a smaller selection, higher prices and crappy return policies.

    Now with Circuit City gone they have ZERO direct competition in the B&M space, they will be able to raise prices and cut service even further.

    Sure you can (and I do) buy many things online but obviously you can't get anything same-day and bulky items such as TVs or appliances aren't always practical (I can't imagine trying to return a defective TV by freight).

    CC was great because when you needed something same day it was quick and easy to order something online and pick it up in the store. I guess not enough people agreed with me though.

    I have avoided Best Buy for a few years now, guess I have no choice but to go there now, I'll have to remember to bring lube when I go. :(

  • by nobodyman (90587) on Friday January 16, 2009 @07:05PM (#26490419) Homepage

    I worked as a cashier in the Circuit City music department for the first couple years I was in college. It was a pretty low-key job and since CD's were really just a loss-leader to get people into the store there was really no pressure on me to sell. As long as I kept my work area clean and provided good customer service my boss was happy and life was cool. And every month I was able to take home any of the promotional CD's from the previous month - so on the plus side it gave me a chance to appreciate music I wouldn't normally be inclined to purchase (this was pre-napster, mind you). On top of that, the employee discount was pretty substantial. Overall it was a pretty decent gig as far as joe-jobs go.

    The other departments were a different story. The salespeople were borderline sociopaths. There was tremendous pressure on them to sale -- and I would even see salespeople chewed out in public for underperforming -- but because they were usually such raging assholes it was hard to feel any sympathy for them.

    After I quit (due to getting an internship) I never set a foot back in the store. I knew how much the markups were on were on everything, and I couldn't bring myself to actually pay for music.

  • by sdo1 (213835) on Friday January 16, 2009 @07:34PM (#26490829) Journal

    The advent of DVD was a huge time for consumer electronics. And Circuit City tried to hijack it with their own pay-as-you-go scheme called DIVX ( http://en.wikipedia.org/wiki/DIVX_(Digital_Video_Express) [wikipedia.org] ), not to be confused with the video codec DiVX. To put it mildly, it pissed off legions of die-hard gadget junkies... you know, the ones who advise their friends and family about technology purchases. The way the company handled that left a bad taste in the mouths of the customers they needed most...the ones who actually buy the high-tech gizmos.

    Thankfully DIVX failed, but I never forgave Circuit City for that and I never spent another cent in their stores and neither did many of my friends and family because of it. I'm not alone.

    -S

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