Circuit City - Troubled #2 Electronic Retailer
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On March 8, 2008 I received a comment in an article I had written about Circuit City - Firedog services, in which a reader by the name of John indicated his experiences as an employee of CC. His comments in which he described a lack of training, long hours and in general a lack of job satisfaction brought to light that all may not be well for the #2 electronic retailer. I found this article from siliconvalley.com which states:
Circuit City hasn’t seen a quarterly profit since the second quarter of 2007 and lost more than it had expected in the third quarter of its fiscal 2008, which ended Nov. 30. Now, it anticipates reporting a “modest loss” in the fourth quarter, which included most of the crucial holiday-shopping season.
The nation’s No. 2 electronics retailer, Circuit City is not faring well compared to No. 1 Best Buy Co., which reported a 52 percent jump in profits in the quarter ending Dec. 1. Circuit City has rejected takeover bids and seen several key executives leave over the past year. Then, late last month, a major shareholder proposed a clean sweep of the company’s board.
Circuit City already has doubled its credit line to $1.3 billion, which Schoonover said gives it the liquidity to continue the turnaround “even if the economy doesn’t support us or if competition gets tougher for a period.” The credit also puts the company’s large vendors at ease, he said.
I think my concern would be how long CC can hang on in a economy which is either in a recession or heading for one. If one did make a purchase from CC with the purchase added an extended warranty, how would one collect if CC closed down? Just a thought.
Comments welcome.
John’s comments are here.
here.
[tags]circuit city, retailer, electronics, credit line, sales, firedog, competition, company, [/tags]
6 Comments
Bruce
March 11th, 2008
at 12:42pm
Ron - As a consumer I worry about an outfit like Best Buy losing any of its competition. Beyond the weekly sale prices and loss leaders have you ever checked out the prices of simple USB or printer cables at Best Buy? Talk about sticker shock! I can only imagine what will happen to prices if Circuit City closes down. The only competition left for Best Buy in my area would be Staples and Office Depot - and that’s like no competition at all since they are already priced at full retail or above for the most part.
Circuit City has already shut down its store nearest me and, since that is where I purchased a lot of my electronics (when I did go Big Box and not internet), I do miss it being there - never was much of a Best Buy fan.
the oracle
March 11th, 2008
at 9:50pm
Best Buy isn’t. ’nuff said. The problem with Circuit City, at least in my area, is exactly the same as with Best Buy - the employees aren’t on commission, and thus they ae not motivated. Worse still, they simply have no clue about what is new and different, and why it IS new and different. Frankly, I wonder why the HR people at these places hire any of the dolts that work there.It should be as simple as the first question upon coming into the interview. When asked why the prospective hire wants to work there, if the words interested and consumed by desire to know all about what is available don’t come forth from their mouths, the interviewer should simply, courteously say, ‘Thanks for stopping in’, followed by ‘Next!”
As to the extended warranties, the companies that underwrite the warranty are clearly specified on any paperwork, so that if any brick and mortar went up in smoke, the consumer would still have a point of reference and the ability to receive warranty performance.
Ron Schenone
March 12th, 2008
at 5:25am
Hi Bruce,
Thanks for sharing your experience with us.
Heh Marc,
Good point about the warranty.
Rick Hogan
March 13th, 2008
at 9:37am
Oracle,
“Frankly, I wonder why the HR people at these places hire any of the dolts that work there.”
Could it be because these “dolts” are the only people they can find who speak English and will take a low paying job? Lets face it, people who really know what they are doing can easily get much better paying jobs than they can get at Best Buy or Circuit City.
Yeah, I suppose they could start paying better to attract better employees, but what do you suppose they’d have to do if they started paying better salaries? I’m pretty sure there are only two options: Raise prices or lose money and go out of business.
Rick
John
March 21st, 2008
at 7:55pm
Hey Ron, thanks for mentioning my post about working at CC. I just think that since this mass layoff of 3400 employees (5 or 6 were close friends) CC has gone way way down hill. These 5 or 6 friends of mine had for the most part been employed by CC for the better part of 2 or 3 decades. The most knowledgeable people on the store front. If you ask me, it makes more sense to get rid of the people in higher up positions that are making $75-$200K a year. Obviously if you’re techs and salespersons aren’t getting the training ans support they need, these people should be the ones to go. NOT the people that have poured a huge chunk of their lives into this place only to be replaced by someone willing to wok for peanuts. Our sales people at my store have no training except for the e-learnings that they can fast forward through and still “complete”. Their ‘new’ training involves carrying around tablet PCs that they look answers up on. And, for the most part, they still can’t even get that right. We finally have some training (after 2.5 yrs of employment) comming up.. Only problem: it’s how to use the new laptops their giving us. Anyone who reads this.. Yes, some of us are good at what we do (I have 12 yrs of prior experience).. But beware.. The ‘trained and certified’ quote that is used to describe us is NOT true. We are not trained on anything more than how to lift 75lbs with your back and how not to drive the work van. Over a year ago, CC sent me to get certified for a whole house automation system that we’re carrying. I’m the only one certified in this at our location. As of today, I still have yet to program or play with these systems.. Even though we’ve sold probably 10 of the systems.. Sorry for my ranting, but I’ve seen this firedog thing through since the beginning. And, for the life of me, I can’t understand why any company would let a program be so unorganized for so long.
Ron Schenone
March 22nd, 2008
at 8:25am
Hi John,
This is typical of many large companies. They keep the higher ups and toss out the working folk. If CC continues with this policy I can almost guarantee they will close up shop just like the Good Guys.
No problem with ranting. I appreciate your taking the time to keep us updated as to what CC is facing.
Regards, Ron