In November 2008, the 59-year-old company filed for bankruptcy. Best Buy was the most significantthreatto Circuit City, largely because it offered a better store experience. Within months, it closed its stores and liquidat-ed more than $1 billion worth of merchandise, and on March 8, 2009, the last Circuit City store turned off its lights for good. [62] The Canadian operations, which were run under The Source by Circuit City banner, were not initially affected by the liquidation, but were later sold to Bell Canada. Bankruptcy protection, filed on Nov. 10, became the only option. The player was connected to a phone line to check whether the disc was still valid. Greg Lowery of Alexandria, Va., is another customer who has spent a lot of time here recently every day, he says taking advantage of last-minute deals. In locating stores, Circuit City adhered to a policy of clustering them together in the same geographic area, which allowed for economies of scale in advertising and promotion. Announces Changes to Improve Financial Performance", "Circuit City plans to close dozens of stores", "Departure Of Foss Shocks Circuit City Investors - Forbes", "Circuit City Cuts 3,400 'Overpaid' Workers", "Circuit City's Job Cuts Backfiring, Analysts Say", "Blockbuster withdraws proposal to acquire Circuit City", "Circuit City Orders All Stores To Destroy Issue Of Mad Magazine Parodying "Sucker City", "Breaking: Circuit City Closing 155 Stores", "Eight Reasons Why Circuit City Went Bankrupt", "Circuit City laying off headquarters employees", "Circuit City Stores, Inc. - 3:08-bk-35653", "Circuit City files for bankruptcy protection", "Amazon is about to claim a new victim in the retail apocalypse", "Circuit City Seeks Bankruptcy Protection", "washingtonpost.com, Circuit City Files for Chapter 11 Protection", "Mexican tycoon Salinas sets eyes on Circuit City", "Bankruptcy to kill 150 jobs at local Circuit City stores", "Verizon Wireless lays off employees formerly at Circuit City", "Circuit City's Final Sales Day: Key Indicators Found in Chapter 11 of the U.S. Retail Industry Story", "2009 Retail Store Closings and Liquidations: Complete and Updated Ongoing List of Retailers Going Out of Business", "How Liquidators Profit from Circuit City's Loss", "Circuit City brand, Web site sold at auction Associated Press May 13, 2009", "Systemax Announces Definitive Agreement to Acquire Selected Assets and Retail Stores From CompUSA", "Systemax To Cut Circuit City, CompUSA Brands, Exit PC Manufacturing", "Circuit City is back from the dead, again - CNBC.com", "Circuit City Update: 'Taking Our Time To Get It Right', "Comcast and Circuit City Opening Second Connect Store", "Circuit City Stores, Inc. Company Timeline", "Circuit City unit Patapsco lays off one-third of staff", "Important information about RadioShack Canada", "New Jersey Office of the Attorney General", "Schacter, and as representative for all persons similarly situated vs. Alan L. Wurtzel, son of company founder Samuel S. Wurtzel and himself a former chief executive of Circuit City, has previously said the company didn't take the threat from Best Buy seriously enough and at some points was too focused on short-term profit rather than long-term value. That created an opening for Best Buy, now the top electronics chain in the U.S., to surge ahead. The next year, Circuit City opened five more Superstores in the market and closed the licensed electronics and appliance departments it operated in Zodys stores. The first location opened in Richmond, Virginia in September 1993. In the years 2003 to 2007, it spent nearly $1 billion on stock purchases. "Actually, there are really no deals, because everything is gone.". And it missed out on big in-store promotions with thriving companies like Apple Computer. Jeff Goldman may be reached atjeff_goldman@njadvancemedia.com. Later in the same month, it declared bankruptcy. [49] [50] On November 7, 2008, Circuit City laid off between 500 and 800 corporate employees from its Richmond, Virginia headquarters. Systemax consolidated with TigerDirect in November 2012, and the Circuit City brand name ceased to exist 63 years after its inception. How To Answer The Common Interview Question: How Do You Handle Criticism? The demise of Circuit City is a cautionary tale in complacency, poor strategy, and bad Many of the stories themselves were also out of date. } }, First published on November 13, 2008 / 12:34 PM. [89] In 2002, Circuit City began offering a co-branded Visa credit card. Baker pointed to many other missteps in management, among them: not declaring bankruptcy sooner, not getting into the music and movie business earlier, takeover bids in the mid-2000s, and exiting the appliance business in 2000. "They were really nice. 2019 TIME USA, LLC. Market data provided by ICE Data Services. The plug is finally expected to be pulled on the unwinding of Circuit City Stores Inc. Circuit City requested the matter be dismissed. The Richmond, Va.-based firm, with revenues of more than $12 billion, had been one of the pioneers in the 1970s and 1980s in mass marketing televisions, refrigerators, stereos and boom boxes. The court found that important information pertaining to sale items was purposely obscured within the advertisement, thus potentially deceiving customers. The company had taken on a lot of debt to finance its expansion, and when consumer spending dried up, it was unable to meet its financial obligations. He believes that turning around a failing business in the midst of intense publicity is not possible. A total of 43,000 people lost their jobs as a result of the companys collapse. While Verizon was one of the largest telcos in the United States, the inability to sell phones from other brands limited profits and, like so many other missteps, positioned Circuit City as inferior to Best Buy where consumers could purchase whatever brand they liked. That should tide it over through the holidays. "Actually, we were looking for some TVs and some DVDs. Powered and implemented by FactSet. All rights reserved (About Us). Sales continued to decline, but Circuit City had a considerable amount ofcashon hand after spinning out its automotive chain CarMax and selling a private label credit facility. (See the 50 best websites of 2008.). Odds are against Circuit City's ultimate survival. During its heyday in the 1980s and 1990s, Circuit City was thesecond-largest U.S. electronics retailer after Best Buy. The Leading Source of Insights On Business Model Strategy & Tech Business Models. KEYES: Other shoppers like Patty Johnson(ph) came out of the store bereft of all that their memories of better times for this once bustling store. This was controversial because in the previous year Circuit City was the second largest appliance retailer in the United States, behind only Sears. They're going over wires and TV stands, the little stuff," said Roman Garcia, 30, carrying a bag crammed with videogames. "This represents the third departure of a senior executive in the past six months, and the second departure of a top-five executive in the past month" said Goldman Sachs analyst Matthew Fassler in a client note. [citation needed], In 1981, Circuit City entered the New York City market by acquiring the six remaining stores of the bankrupt Lafayette Radio chain. Ultimately, the hobbled credit market and consumer worries proved insurmountable. This brand will remain in place for a few more years as it is consolidated into the TigerDirect brand. [34][35] RadioShack sued InterTan in April 2004 over the branding use of RadioShack in Canada. This weekend, the nation sees the closing of yet another big box store. Circuit City, here on Broadway and 86th St. in Manhattan, shut down for good on Sunday. How To Do Attract New Customers To Your Business? During A Job Interview, Notre Dame: A Private School With A Rich History And Successful Alumni. Among the items to be sold areaudio/visual, computers, gaming, imaging, small appliances and smart-home products. [42] The Post later reported in May 2007 that the layoffs, and consequent loss of experienced sales staff, appeared to be "backfiring" and resulting in slower sales. Circuit City suffered from complacent management who also made poor decisions. [17], In 1988, Circuit City began constructing the new "plug" design Superstore formats. [27] The front of the store featured windows allowing customers to see in and the signage was improved. In the wake of the credit crunch of the time, many such companies were reluctant to do business with Circuit City which had little to no cash on hand. [9][10][11] The large-format store was very popular with customers. Please enter valid email address to continue. In 2001, Chicago stores were remodeled with parts of this format and all new locations opened with this design. WebOn November 4, 2008, Circuit City announced that it would close 155 stores and lay off 17% of its workforce by the end of the year as a result of continuing difficulties in remaining profitable. The liquidation of the long-since collapsed Henrico-based electronics retailer appears to be coming to a close, nearly 13 years to the day from when it toppled into bankruptcy on Nov. 10, 2008. [14], In 1985, Circuit City entered the Los Angeles market by opening seven Superstore locations in former The Akron discount stores. CarMax used the proceeds to repay Circuit City's initial $170mm investment in the company, then used the remainder to grow rapidly, adding 27 more stores from 1997 to 2000, and turning its first profit in FY2001. When it spun off CarMax, it let a lot of talented management go with it. Circuit City would like to thank all of the customers who have shopped with us over the past 60 years. [56] Chief executive James A. Marcum promised that the stores would stay open and the chain would not be liquidated. [48], On November 4, 2008, Circuit City announced that it would close 155 stores and lay off 17% of its workforce by the end of the year as a result of continuing difficulties in remaining profitable. They now sell a variety of top-tier electronics brands such as ASUS, Sennheiser, HP, Garmin, and more. Largest North Texas Retail Leases Ranked by Lease Category And more than 34,000 employees, some who worked through the liquidation announced in January, will be jobless. For example, as online shopping became more popular, the company failed to invest in its online presence. and/or its affiliates. Circuit Citymanagementmade several inexplicably poor decisions in the years leading up to its bankruptcy. And Hilco Merchant Resources LLC, a Northbrook, Ill.-based retail consulting and liquidation firm, said it hopes to buy the brand name and Web site. [28], In March 2002, Circuit City purchased the key assets for 800.com, which included their entire 2.6 million customer list, websites, and marketing assets. In 2002, Circuit City opened its doors in China for the first time. A WarnerMedia Company. In 2000, Circuit City moved away from the Superstore showroom format and introduced a new more self-service "Big Box" format called "Horizon." 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