Circuit City's comeuppance

Tom Jackson
Mar 23, 2010

 

Isn't it fun when a bunch of jerks get their just desserts?

The New York Times has reported that Circuit City has filed for bankruptcy and its stock has lost 90 percent of its value since the beginning of the year.

For years the way I felt about electronics stores mirrored my long love affair with Chinese restaurants: I never met a technology store I didn't like. I can browse forever in such stores, whether you're talking about Best Buy, Radio Shack or Staples. I liked Circuit City about as well as I liked anyone.

I changed my mind last year, when Circuit City axed 3,400 of its most experienced employees, so it could fill their slots with ignoramuses who would be paid less. The laid-off workers were invited to come back later for less money.

Sales dropped at the stores. Apparently customers buying a fancy TV or a new computer want to deal with employees who know what they're talking about. Others, like me, felt the way the store treated its employees was just plain wrong.

Philip Schoonover, the architect of the plan to downgrade customer service, was forced out in September.

Of course, the fired executive probably isn't drawing welfare, and the stores' current woes will likely fall upon the folks who still work there. There's no perfect justice in the world.

Comments

Anonymous

I would look at the Circuit City ad and see a great deal. I would go in with money in had to first day of the sale just to be told that they did not have any of them in stock, but they did have more expensive models. This happened about 4 times before I finaly caught on that Circuit City's ads were just lies so you would come to the store.

Anonymous

the same thing at best buy they never have the sale stuff. especially computers.

Anonymous (not ...

Mr. Jackson, I still don’t understand your sense of schadenfreude regarding CC.

Do ya really think that Best Buy is long for the market?

History is littered with the carcasses of hundreds of defunct individual electronic stores and big box chains.

Does anyone remember Detroit’s Highland Appliance or Cleveland’s Tokyo Shapiro?

For some time, electronics has largely been a commodity and the Web has replaced a lot the expertise once needed by salespeople.

If you seek justice, you may have stopped off on the wrong planet. There is no justice in this world, only degrees of occasional mercy and revenge.

Your writing with this sense of ‘justice’ and compassion suggests that your spouse may have slipped you an Obama laced cocktail. Perhaps a reading of ‘A Nation of Sheep’ by Judge Napolitano will help.

RHammons

These guys have been heading nowhere for a while. I think it was last year or end of the year before when they decided to close 65% of their stores - anyone could have seen this coming. As for the comments below, I think Best Buy's here to stay (at least for the , simply because nowadays their stores are actually an arm of their web presence. When I find myself shopping there its usually after placing an order on the web, to be delivered to the local store... as its a web only deal, or something they don't stock at all stores, especially the micro concept stores that we have. I think this strategy will work as long as they can compete with other e-tailers, as they do, on the big ticket items such as TVs, video game consoles, and PCs.

Anonymous

Winston,
Perhaps "justice" is not the right work, but this is a pleasant example of the free market at work, to wit:
(1) Circuit City deliberately made customer service worse, and was punished by the marketplace, and
(2) Circuit City, at least, is apparently not going to be propped up with a "bailout" of taxpayer dollars. It almost makes me like the chain.

Anonymous (not ...

Mr. Jackson, I for the most part agree. I tend to prefer social and economic Darwinism.

Now, regarding the Detroit automakers, I say let ‘em fail.

The marketplace’s faith in any co. is strongly reflected in the price of its common shares. GM and Ford shares are the equivalent of penny stocks. The market has clearly spoken.

With that in mind, if the govt. gives them money it is a clear-cut case of wasting taxpayer money.

Anonymous (not ...

CC shoulda pulled an AmEx and filed to become a bank holding co. in order to perhaps qualify for a govt. bailout.

On the other hand, Nat. City who is a 'real' bank was refused a govt. loan.

I guess in the brave new fascist world, there are those cos. who are small enough to be allowed to fail and will die by the economic sword of creative destruction.

Good to know that the Intelligentsia will be guiding capitalism, the Soviets did such a fine job with Gosplan. Of course we now have high-speed computers and can mess it up better.

My experience with CC in 11/06 when buyin' a wide screen was both courteous and professional. 24 mos. no interest payments – sweet. It’s still working fine after I made the last payment.