Circuit City leads list of sinking retailers
posted at 10:15 am on January 17, 2009 by Ed Morrissey
The economic downturn has provided the final blow for a slew of big-box retailers, and Circuit City is the latest to unplug. Without a last-minute reprieve, the second-biggest electronic retailer in the US will close all of its stores and lay off 30,000 people. They join a growing list, and malls around the nation may find themselves in a space glut:
Circuit City’s announcement Friday that it will shutter its remaining 567 stores nationwide, including 16 in the Chicago area and northwest Indiana, cutting 30,000 jobs is the latest in a growing list of retail deaths paving the way for unprecedented changes, experts say.
Circuit City, the nation’s second-largest consumer electronics retailer, joins Goody’s, Steve & Barry’s, Linens ‘n Things, Sharper Image and KB Toys in liquidation, and leaves mall landlords with the challenge of filling the space or reinventing it. The Circuit City stores expect to hold liquidation sales through March.
Circuit City was unable to obtain the needed financing or vendor support to continue operating, despite interest from two potential buyers — the Golden Gate Capital private equity firm and Mexican billionaire Ricardo Salinas Pliego.
I spent ten years in retail security, working closely with national chains, and at least a few of these chains had begun to fail long before the downturn in the second half of 2008. Big-box retail operates on large volume and thinner margins, and bad management decisions and competition can have an oversized impact. Those already on shaky ground could have been expected to collapse entirely.
The only retailer on the list that surprises me is Steve and Barry’s. S&B sells clothing at cut-rate prices, usually at $8.95 per piece for shirts and jeans. I’ve bought clothes there in the past, but it’s really aimed at younger buyers, especially in the women’s clothing section. In a tough economy, discount sales usually succeed if they can make a profit. I would have expected S&B to thrive in a recession as people tried to stretch their dollar as far as possible. I’d assume that the economic downturn didn’t create S&B’s problems, but may have contributed to them in the end.
Sandra Guy, reporting for the Chicago Sun Times, makes an important point:
Paco Underhill, a retail anthropologist and author of Why We Buy: The Science of Shopping, said he expects more retailers to close, paving the way for massive change.
“Retail historically is about birth, life and death. It frees up space and people for more creative uses,” Underhill said.
In fact, that’s true of the entire free-market system, and the reason why government should not get involved in bailing out private enterprise. Economic downturns shake out the weak players and returns resources to the market for better, more efficient use. It’s a painful process, but it eventually produces strength by rewarding the best business practices and the wiser investors.
Blowback
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Most of the retail workers make very little money. Rather than bailouts I’d be much more comfortable if the majority of the bailout money were spent on retraining into tech skills/medical skills. These are growing areas and ones that need qualified workers.
The only workers that might take a pay cut as the economy recovered would be the auto workers.
Bradky on January 17, 2009 at 10:19 AM
If any retailer ever deserved to fail, it’s Circuit City. I stopped shopping there years ago because I got tired of telling their sales weasels what they could do with their long-term service contracts.
RedWinged Blackbird on January 17, 2009 at 10:29 AM
Another article I read recently stated that we could see dozens of big name chain stores tank this year. I for one am hoping that this trend will lead to more local small business retail stores. It might even bring back some of that good ole US product manufacturing that we have abandoned in recent decades. Made in the USA! When was the last time you saw that tag.
dddave on January 17, 2009 at 10:31 AM
Our mall here in Syracuse had a Circuit City, Steve & Barry`s and KB Toys. Maybe now was a bad time to expand the place.
Also, I always went to Best Buy right above C.C. anyway.
ThePrez on January 17, 2009 at 10:32 AM
Not surprised to see Steve & Barry go under – their clothing lines were poorly made of the cheapest cotton/cotton blends available, stores tended to be over merchandised (almost to the point of WalMart-like quantities) making it difficult to get around the store.
Looks like I’ll be getting the converter box for the cabin at a major discount now.
Blue-eyed Infidel on January 17, 2009 at 10:33 AM
“…he expects more retailers to close, paving the way for massive change.”
Massive change we can believe in.
Hopefully it does lead to new opportunities, but I can’t help but suspect that there will be a long term glut of suburban retail space.
forest on January 17, 2009 at 10:36 AM
If any retailer ever deserved to fail, it’s Circuit City. I stopped shopping there years ago
RedWinged Blackbird on January 17, 2009 at 10:29 AM
Truer words never spoken and all that. I bought one thing from them ever, and hated doing that. Rude, pushy, ignorant of product, eliteist, and, once when looking for a camera, zero stock, yet happy to still take my cash if I parted with it.
Hey Circuit City, don’t let the door…
TinMan13 on January 17, 2009 at 10:36 AM
Big Box retail, soon to be followed by many small specialty retailers, are “victims” of the housing boom. With the false wealth created during the housing boom that contributed to the run up in housing prices, growth in Home Depot and Lowe’s et al also came the rapid growth in new malls and retailers built to meet the wants (not needs) of all the new suburbanites and other new homeowners. With the economy set to reset to a level it might have attained had the government not goosed housing via CRA and Fan/Fred there will be a lot of downsizing in the number of retailers and stores of existing retailers. As with every bubble driven growth binge, this too has to retreat.
This is why the stimulus is sheer folly. I think the American people have awaken from a collective drunken spending spree and we won’t see the same per capita level of spending again, if ever, for a long long time. As a result there is too much capacity. The same is true for the automobile market and is one reason the bailout of the GM and Chrysler will fail. Too much capacity for the present and future demand. Americans won’t be buying new cars with home equity loans anymore nor will Americans feel the need to trade in or trade up every three years. Expect people to buy more used cars and for them to hang on to their existing cars longer. In time this will create some pent up demand that will need to be released but we won’t see unit sales where they were for a while, again if ever.
I work for Wal-Mart in the Home Office and though I feel bad for the folks at Circuit City their liquidation benefits us.
Made in USA
DerKrieger on January 17, 2009 at 10:41 AM
Here Here.
I hate circuit city.
I knew about 9 months ago, it was going under. Ours had a homeless guy standing on the street waving signs “up to 50% off” for a week or so. Then they declared bankruptcy, now they are liquidating. I wasn’t surprised.
It’ll happen to best buy eventually as well. Just as it did CompUSA the others.
What’s amazing (and odd) is that Radio Shack is still around. Who shops at Radio Shack?
lorien1973 on January 17, 2009 at 10:43 AM
Good post Der Krieger.
forest on January 17, 2009 at 10:43 AM
Boscov’s has asked for a bailout from the county it is located in…Blair co. in Pa. The store is located in a city packed with malls, department stores, discount stores,etc.
Blair county is almost broke and should not be handing out money to a store. They havent decided yet and the majority are against it. The store is too expensive for most to shop in. They need to let bad stores close and allow better ones to grow.
becki51758 on January 17, 2009 at 10:44 AM
It’s not quite right to blame the economy for the collapse of Circuit City.
Several years ago, CC got a new CEO who decided to cut costs. He discovered that a large number of sales clerks had higher salaries than the rest because they’d been there longer. So he cut the people with the most experience, leaving the annoying, short-time clerks to make people like TinMan13 and RedWinged Blackbird pissed off at Circuit City, thus losing their business.
Circuit City, whose sole business is retail sales, had a CEO whose brilliant cost-cutting plan was to get rid of the people who were best at retail sales—because he could save a little money on salary. Because of course, one salesperson is like another.
I worked at Circuit City HQ for the last half of 2006. It was one of the best places I’ve ever worked, filled with good people with a great attitude towards the company. The terrible decision of one man destroyed thousands of jobs. And the ripple effect will be felt for some time. Circuit City was in two buildings in the West End of Richmond. Those buildings will now be vacant. The food services company lost the business. The local businesses where we went to lunch and shop will no longer have thousands of customers from Circuit City.
This is not a cause for rejoicing, no matter what kind of lousy service you had at a store. But that lousy service was the direct result of Philip Schoonover’s stupid idea.
Wonder how much of a golden parachute he got?
I hope it was all in Circuit City stock.
Meryl Yourish on January 17, 2009 at 10:45 AM
I will at last have enough mall space for opening my gun shop/vibrator sales/repair superstore.
Guns-n-O’s
“Finally, a store for the both of you”
quax1 on January 17, 2009 at 10:46 AM
Too many stores chasing too few customers.
Added factor: Internet shopping.
(Plus Wal-Mart and Costco.)
Plus with it seems like people have less time to do everything, is in-store shopping the best way to spend one’s time?
albill on January 17, 2009 at 10:48 AM
I totally agree. And walking into the store, I never felt that it was “up to date”. Plus the floor guys never knew *anything*… There was this totally weird vibe from Circuit City so I stopped going there ever again like years ago.
Summer on January 17, 2009 at 10:50 AM
Me too. If anyone has a little cash on hand and they have been thinking about starting their own business, now is the time. Just make sure your business will serve people who are trying to save some money. Now is not the time to become an Event Planner or Kobe steak importer.
IrishEi on January 17, 2009 at 10:52 AM
Yes, by all means, why don’t we throw anothe $700b at the education system.
———————
CC has been going down for a while. What you say at the end of your post, Ed, is what has ahppened. Best Buy and other electronic retailers just pushed out the mismanaged, ill-modeled CC.
P.S. Obama and the Congress are pushing us towrads a long term depression. Gylax, my investment guru, says: Invest in inferior goods!!!
VolMagic on January 17, 2009 at 10:55 AM
Frankly, I like Circuit City more than Best Buy.
terryannonline on January 17, 2009 at 10:55 AM
Democrat: “That’s racist!” So says the buggy whip industry.
RickZ on January 17, 2009 at 10:56 AM
I never liked Circuit City because they have a security guy at the door who checks your receipt. Always hate it when a store assumes everyone is a thief.
Bought a freezer about 20 years ago at Tops Appliance in NJ. Paid by check and they actually brought me to the service area to have my picture taken! Never went back to that store, and they closed down maybe 10 years ago.
IrishEi on January 17, 2009 at 10:58 AM
Retail wages are notoriously low, especially for chain stores like those that are closing. My question would be where do these thousands of people fall in the Obama scale of classes. Will he take these people into consideration when trying to miraculously create a trillion new jobs or are they going to be part of “putting the poor back to work” (per Jesse Jackson).
sherry on January 17, 2009 at 10:58 AM
Perhaps you don’t understand what the word rather means …
In place of, in lieu of, instead of….
So what is your answer big guy? Let the out of work people move in with you?
Bradky on January 17, 2009 at 11:00 AM
Blair County bailing out Boscovs? I agree – that’s insane.
forest on January 17, 2009 at 11:01 AM
The model of Good Guys and Circuit City were replaced long ago by Fry’s and Best Buy. Circuit city was only my store of last resort. When Fry’s and Best Buy were out of a product, one could rely on Circuit City to have it. Why, because no one shopped there and their prices were always the highest. For years, Even during peak shopping seasons their stores were empty. But they always had a sale on blank DVD-R’s that I’m going to miss.
Zaire67 on January 17, 2009 at 11:02 AM
Meryl Yourish – you are absolutely right! JCPenny did the same thing. To “reduce costs” they got rid of all the old sales people that knew anything because they were paid too much. They then replaced most of them (not all) with low paid dunces. The vital few that were left that could mentor the new people had their hours reduced to the point they lost any benefits, such as sick leave or vacations. Most of them have since left. JCP has been on the verge of going titsup ever since.
The culprit in this is the accountant that pursuades management the best way to increase profits is to reduce “cost of sales”. I have been with companies where the accounting pukes main goal was to reduce “cost of sales” to zero by eliminating sales. They never understood what they did even while being laid off. If Congress really wants to give the economy a boost, copy the Chinese. Pass a law that whenever an accountant even uses the words “cost of sales”, he/she/it is immediately taken outside and shot.
Old Country Boy on January 17, 2009 at 11:04 AM
How about putting that big f*cking parasite in DC on a diet so people and entrepreneurs have more resources at hand? Novel concept, I know.
doubleplusundead on January 17, 2009 at 11:05 AM
It is funny that you hype your madeinusa link while at the same time tell that you work for walmart, which sells more foreign made products than Carters has pills.
Bradky on January 17, 2009 at 11:07 AM
I get rather. I’d rather the government didn’t spend my money on either the bailout(s) or your novel idea to “invest in the future” with vocational training. You do know what “either” means, don’t you?
VolMagic on January 17, 2009 at 11:09 AM
I just got back from the local CC. Liquidation, my ass. Everything at their typical “full retail”, with signs everywhere stating “All Sales FINAL”. Perhaps in early-mid March when they are close to closing and are desperate to dump stuff. You’ll do better at Tiger Direct (and may avoid sales tax).
And I do shop at Radio Shack. It’s good for the cables, and oddball components that CC and BB charge an arm and a leg for.
Dr.K on January 17, 2009 at 11:10 AM
I do, and have for years. The two I use are both staffed with good salespeople. I’ve used both CC and Best Buy in the past and never went back. I bought a demonstrator floor model large screen TV from Best Buy, they didn’t send the instructions and claimed they didn’t have to do it because it was a demonstrator. Never went back.
a capella on January 17, 2009 at 11:11 AM
Did you ever stop to consider what part of the economy transformed after the 81-83 recession? It was a move away from manufacturing based economy to the high tech/information tech age.
Medical & IT tech skills are in big demand and if you want to see the recession do something besides fester you should consider what positives come out on the other side.
Retraining a displaced work force is far cheaper than bailing out companies that should go under per competition and free market.
Workers who have a marketable skill earn a higher salary and in turn contribute more to the tax base.
Small business ownership is not the sole answer to the problems at hand.
Bradky on January 17, 2009 at 11:12 AM
Your solution is to do nothing and let it all collapse before it can rebuild — got it. Be careful what you wish for.
Bradky on January 17, 2009 at 11:14 AM
As for Circuit, at least locally, the guys there are very knowledgeable, but you about have to drag them kicking and screaming to help you out if you need assistance. Best Buy isn’t as knowledgeable, but they at least try and help.
We’re going to see a lot of the big retail stores fold or get swallowed up. I’m guessing Office Depot and Office Max will go under or be swallowed up by Staples, Office Depot just shut down over 100 stores, the one in town is in liquidation. I’ll be curious to see what happens with toy stores. I know KB Toys is folding, Toys’R'Us is an obvious beneficiary, but I wonder what’ll happen with Toys’R'Us, if they’ll find themselves cut down by Gamestop/Best Buy/Intarwebs on the video game side and Wal-Mart/Target/Costco/Intarwebs on the other.
doubleplusundead on January 17, 2009 at 11:18 AM
Depends on your definition of “collapse” and “nothing,” but from where I’m sitting, yeah, that sounds good to me.
QQ
VolMagic on January 17, 2009 at 11:19 AM
The Great Depression taught us that corrupt, incompetent government bureaucrats cannot run business as well as business can. After 8 years of Roosevelt’s incompetence unemployment was still around 20 percent.
To the government: STAY AWAY from our economy. You’ve screwed it up enough already.
Mojave Mark on January 17, 2009 at 11:19 AM
I agree. Two years ago I was looking for a new PC. CC beat Best Buy and CompUSA by $50. I skipped the service contract and didn’t need knowledgeable staff because I already knew what I wanted.
To me, Best Buy is the same as CC with slightly higher prices.
A few months back I went to CC looking for a DVD/VCR and ended up buying it at WalMart for $10 less.
It’s true. CC was hurting before the economy tanked. Bailout’s are only going to reward marginal businesses which will hurt the ones that are thriving on their own.
Ordinary1 on January 17, 2009 at 11:26 AM
I have and I do. Not for big purchases, but Radio Shack seems to always have that little doo-dad, or obscure cable that I need and it’s always been easier to run into this smaller store, where the employee knows exactly what I’m looking for so I can get in and get out quickly without fighting my way thru a maze of aisles of DVD’s, CD’s and other stuff that I can buy cheaper, without sales tax, and with free shipping over at Amazon.
Amazon sells everything from food staples to blue jeans now and it’s damn near impossible for anyone to beat their prices, including Best Buy. Why fight the crowds, pay sales tax when you can get it delivered to your door in a couple days? That Amazon Prime service was pure genius.
Knucklehead on January 17, 2009 at 11:28 AM
There’s a CC near me and I’m going to miss it. And I will feel sorry for those who will lose their jobs.
Blake on January 17, 2009 at 11:29 AM
I don’t disagree, but small business’ll help hugely. Plus small businesses don’t always stay small. On the other hand, I don’t want to hear a damned word about spending until we see something about spending cuts to pay for it.
DC is out of control, and we’re going to be left paying the tab these vermin left us. We shouldn’t be bailing out anyone, we should be trimming any waste in DC that we can (and you and I know there’s plenty that can be trimmed). Then take some of the money that was previously being wasted and invest in retraining/education/infrastructure.
The current situation is not acceptable, we’ll be bankrupt or driven to third-world status if we don’t stop the parasites in DC from killing their host. Until I see some effort to bring DC under control, NO to anything involving spending.
doubleplusundead on January 17, 2009 at 11:32 AM
I have always liked CC and I hate to see it go.
d1carter on January 17, 2009 at 11:34 AM
Circuit City was going down before this crisis. A lot of my clients would buy computers there. They got roped in this contract. They would have problems and the techs there would claim the system was fixed. They ended up saying screw them and bringing their computers to me to fix. I was desperate a few times and bought memory, and video cards there. Had to send back almost all that I purchased. Then when you go in there, you are lucky to get a sales person to help you. They see you and they walk around and ignore you. I asked for help and the girl had the nerve to tell me that I had to wait. I told her where to go and never went back. I think they changed when they were forced to Unionize. That is when it went all down hill. It wasn’t this crisis CC was going down for about two years.
sheebe on January 17, 2009 at 11:35 AM
I third and fourth that vote. Spent signifigant $’s and 6 HOURS in the car stereo installation bay beFORE they’d admit the disc player and speakers their in-store compatibility matrix blessed for installation in our Audi…would NEVER in a million years fit.
That’s all it took for us.
tree hugging sister on January 17, 2009 at 11:37 AM
I posted the link in response to another poster and I personally buy American whenever I can. Drives my wife crazy that I always look to see where products are made.
But I agree, WM has played a big part in the migration of manufacturers to China. But so has the government with oppressive regulation and taxation. In many industries unions also contributed to the out migration of our manufacturing base.
DerKrieger on January 17, 2009 at 11:50 AM
Our government’s answer to a recession resulting from collective over-borrowing and over-spending is to spend even more after borrowing even more. And printing more.
Yeah, that’ll work.
We need to let bad businesses go and good businesses grow, free from government dispensation of favors for the connected.
Greg Toombs on January 17, 2009 at 11:54 AM
I agree. Why be frustrated by arrogant, lazy, untrustworthy salespeople when you can bypass? The very large retail outlets have allowed their top priority to be volume rather than service. So be it.
a capella on January 17, 2009 at 11:56 AM
Count me as one who won’t miss Circuit City. I wandered into their Dadeland store several times in hopes of finding this or that, but was always treated by the staff as an annoyance; that is, if they acknowledged my presence at all.
SWLiP on January 17, 2009 at 11:56 AM
Oops, sorry about the link. I was trying to respond to Knucklehead’s post.
a capella on January 17, 2009 at 11:57 AM
Have a friend that was the Sprint rep in a CC in college (not a cc employee). He said that it started going bad when they got rid of all of the commission employees and went to wages. The experienced good sales people all got fired and the experienced people that remained were there only long enough to train the new high school and college age replacements. No one wanted to excel because there was no incentive anymore. There was no real means to advance so all of the jobs became temporary in nature. I don’t know if they unionized but the results were basically the same.
cobrakai99 on January 17, 2009 at 11:59 AM
There goes my stock… maybe I can make some of that up at the liquidation sales that start today!
RightWinged on January 17, 2009 at 12:12 PM
Wouldn’t it just be cheaper for the govt. to sabotage the security of online sales systems? People would eventually prefer shopping at brick and mortar stores if they didnt feel secure doing business online. Hey, if they really mucked it up, people wouldnt feel safe just doing the research and they would have to go to stores to deal with sales people. win-win.
Of course I kid.
aikidoka on January 17, 2009 at 12:13 PM
I can use an upgrade on my RAM. Perhaps the liquidation might be an opportunity there.
Ordinary1 on January 17, 2009 at 12:17 PM
Tell them to stuff their receipt check. I do. If they attempt to delay me, I say the three magic words: false imprisonment lawsuit.
exlibris on January 17, 2009 at 12:33 PM
About a year ago I needed a new TV. Looked at the local places and CC did have the TV I was look for. So did BB. However, the price was not to my liking so I checked out the internet. The internet had exactly what I wanted, I didn’t have to pay shipping or sales tax and they delivered it to my door. No wrestling boxes and setting it up was a breeze. Many people had nothing but good things to say about this internet electronics place. They were right. I ended up buying an external hard drive and an I-Pod a few dollars cheaper with free shipping and no sales tax.
In checking CC’s website the exact opposite was true. If they had the product at the store many people were not thrilled with their service. They would have to wait anyway for the correct product and still go back to the store for pick up.
I have never been happy with CC’s service. If you were a young female, then you got waited on. Otherwise you were out of luck. I have had better service at Wal-Mart. Some of those people are actually knowledgeable. My husband goes there quite frequently. He also loves Radio Shack. They don’t have a lot of stuff, but the few guys that work there actually know something. They usually have what you are looking for and are quite happy to sell it to you. Our small town only had a Wal-Mart and Radio Shack up until recently when they built a large retail section south of the old town. We have since lost our Linen’s and Things, KB Toys, and now CC. Can’t say I’ll miss any of them. I love my internet!
BetseyRoss on January 17, 2009 at 1:17 PM
Now that’s the kind of outside-the-box thinking that just might save us.
mikeyboss on January 17, 2009 at 1:25 PM
You gotta watch out for these liquidation things.
Linens n Things liquidated not long ago. They were kind of expensive, and had a lot of things that weren’t all that desirable (their buyers weren’t so hot), but they did have a large selection of small kitchen utensils I’m going to miss.
There was one in our area, and I watched it closely. The first round of sale prices was hardly worth it – I think 20 or 30 percent off (which you can get at a good sale elsewhere) on most items.
I went to look, and they were selling fixtures, too. There was a Lifetime table I would have liked, that basically nothing on it, they had been using for display. But – they wouldn’t sell it, because they said it was still “in use.” They told me I could pay for it now, and pick it up when the store closed. When would that be? Well, we don’t know. Well, how will I know then? Oh, they will call me.
So I passed on that as WAY too iffy. This store was huge, and I kept an eye on it. There was still nothing in there worth the reduction, and most of it hadn’t sold. Then I saw on the Internet that they had finally gone to 50% off on most things, I believe it was, and went to look. The store was (suddenly!) practically empty.
I have trouble believing they were ever serious about liquidating to regular customers at all. I wonder what really happened to all that stuff.
Alana on January 17, 2009 at 1:47 PM
It’s simple.
You want to work in a promising industry?
Go for medical/healthcare industry. It is projected to GROW and I do mean GROW. This is where future action is at if you are willing to study hard and willing to go where the work is. You will always make at least decent income.
Sapwolf on January 17, 2009 at 1:52 PM
Circuit City’s problem was at the store management level and higher. I could tell when walking into the store in Madison Heights, MI that it was not on the ball. It had that ‘nobody accountable atmosphere’ that you sometimes see. Best Buy in the same town was more responsive, and you could tell that if only one would survive, it would be BestBuy, and this was back in 2003.
Then BestBuy put in GeekSquad for minor computer problems and that was it, I never went to CC again.
Sapwolf on January 17, 2009 at 1:59 PM
Circuit City should fail. They had the worst customer service in the world in our area. I think they hired from Night of the Living Dead.
Mommynator on January 17, 2009 at 2:08 PM
I ought to swing by there and snag a cheap laptop.
TheSitRep on January 17, 2009 at 2:18 PM
I am noticing that as these various companies teeter and fall, I am mentally applauding because they’ve managed to piss me off so badly. I’ve bought things at Circuit City over the years, they always advertise big sales and money off, but then then you have to fill out forty-eleven pieces of paper and xerox and mail away and wait for 6 months, by which time you’ve forgotten, and just never mind.
I called Sears the other day about something and got someone in India who didn’t know where Los Angeles is.
I just had a full week of angst because Verizon couldn’t manage to get a tech to my place of work to fix our phones. No phones for a full week, and at least 20 missed and rescheduled appointments by their “service” department.
We switched from Xerox to Canon because Xerox is such a nightmare to work with — horrible voice-mail system, their computer system doesn’t keep track of ANYthing, and when I tried send unused cartridges and other equipment back to them I could not find a single Xerox employee who would claim responsibility.
It’s like a company reaches a certain level of giganticness and then its arteries clog up and it can’t function any more. I wonder how Microsoft has managed so successfully for years now.
But in any case, die, Circuit City, die! I’m glad to see you go.
NahnCee on January 17, 2009 at 2:19 PM
Truer words were never spoke. It’s like they have they technical knowhow of Wal-mart employees with the motivation of a county clerk.
TheSitRep on January 17, 2009 at 2:20 PM
e-Tailers are putting a hurting on the crappy run Brick and Mortars.
jp on January 17, 2009 at 2:21 PM
Don’t even get me started on the sales tax thing. Those of us here in Crook County Illinois pay 10.25% sales tax and the idiots who passed this tax have virtually forced many to drive to Will or DuPage county, or better yet, over the state line to Indiana to do our basic shopping. With gas prices down for the moment, it’s worth the extra couple miles not to be raped on this crazy, highest in the country tax.
Knucklehead on January 17, 2009 at 2:27 PM
Actually Steve and Barry’s going under should surprise you the least Ed. There was a long article in the Wall Street Journal several months ago about their uh, “business model”.
It was basically a pyramid scheme. Steve and Barry’s wasn’t making money off of selling clothes; most of the company’s income was in the premiums that malls pay large retailers to locate in their facilities. Their only way of continuing to receive income was to keep opening new stores. But eventually you run out of malls in which to put a new store, and then operating expenses start to catch up with you.
Also some funny stuff going on with inventory and bookkeeping (claiming already sold stock as collateral to get more credit, for example). Hell of a business model there.
Dreadnought on January 17, 2009 at 2:55 PM
I’ll just say a few words in defense of CC. The sales people there, in my experience were eager to help (and I’m not a “good looking female”) and reasonably knowledgable. I also preferred their stores to the horrible, loud, garish and cheap looking Best Buy stores.
I hate that “unfinished warehouse” look the Best Buy stores have, it always seems very cold, not a pleasant place to shop. But as usual, I guess I’m in the minority–the one I like goes out of business, and the one I hate stays in business. Oh well.
Dreadnought on January 17, 2009 at 3:04 PM
So what electronics retailers are left? Seems Best Buy is in a great position to take advantage of the failure around them. Some mentioned Fry’s, but they aren’t here in Wisconsin. We had CompUSA stores, but they are closed as well. Basically around my area we now have Best Buy and absolutely nothing else–unless you count Walmart. I’m not counting RadioShack as they are a niche company that can get any knick knack you want but otherwise carry limited lines of larger consumer electronics.
BryanS on January 17, 2009 at 3:06 PM
I don’t see why anyone is surprised by this. It happens to retailers every so often. I guess no one remembers how Macy’s got to be what it is today (trying to stay alive by acquiring and merging, while all of the other retailers in that market went bust – retailers who had been in business for many more decades than Circuit City or the other electronics stores). But the clothing retailer shakeout was more than 20 years ago, so I guess that doesn’t count anymore (as liberals, and much of America, have no memory extending back further than 12 minutes). We are in a period devoid of history – at least according to the 52% of morons who voted for the kid from Indonesia to lead the US (that he knows nothing about, and hates the misconceptions that he does have of it).
progressoverpeace on January 17, 2009 at 3:24 PM
Shopped at a Radio Shack for years just up the street. Cool old man that had visitors all the time. I could find what I needed with or without his help and listened to some men gossip at the same time!
Buy local, it’s more fun and mom and pops need to come back!
Coastal Paradise on January 17, 2009 at 3:34 PM
More victims of the Bush years….
Noneya on January 17, 2009 at 3:40 PM
I don’t think anyone is surprised. I’m certainly not. As far as history I’m 47 and my memory is pretty good and it does seem to me that there are less and less different retail outlets for certain types of goods than at any other time I can remember. I’m not sure that’s a good thing over the long run, because I’m a committed capitalist, and capitalism thrives on competition.
Dreadnought on January 17, 2009 at 3:40 PM
I actually used to work for Circuit City. I started in the summer of 2001 and I worked with them until they laid me off in February (I think) of 2003.
Most of the people in the store worked off of commission (including myself). I was in the Audio/Video department. I made good money (it turned out to be an average of $17.50 an hour, as I found out when they laid me off) because I was motivated to _know_ the product, _know_ the technologies and to give good customer service. I was motivated to do this because the more that I sold, the more that I made. (This, in fact, was the big difference between Circuit City and Best Buy at the time- the customer service and knowledge that you could expect from the Circuit City employees due to the commission sales.) (I had a lot of repeat customers because I took my time with them, I explained everything to them, I didn’t try to upsale them and I was very, very honest with them. Thus, I made a good amount of money because I treated the customer well. And, for this, for selling a lot of stuff for Circuit City (making myself _and_them_ a lot of money) I was laid off.)
Anyways, in February of 2003, they laid off _every_single_ employee who was making more than $12 an hour in commission (i.e. all of their knowledgeable, experienced, motivated and friendly salesmen (including myself)) and they switched everybody else (those not good enough or motivated enough to make more) to an hourly wage. In other words, they laid off all of their good employees and kept all of their bad ones.
To me, that was the death knell of the company. While I still shop there and I will be sad to see them go, I am not surprised that it is happening.
How are these CEOs hired? How are they vetted? How do they keep finding work? How are they paid so much money? I’ve seen so many companies messed up by these guys that it’s insane. It seems as if something is out of whack here.
Theophile on January 17, 2009 at 3:44 PM
Don’t worry. Periods of merging and horizontal/vertical integration are always followed by periods of having them taken apart (as we see now). The difference is that we get people who think that they have to stop “market change” by keeping all the companies as they are now – the global warming/climate change sort of idiocy transferred to ruin other areas, as they lose the climate debate to real science.
progressoverpeace on January 17, 2009 at 3:45 PM
It must really irritate the leftists in Congress and in Maryland that Wal Mart isn’t on the list. Under the circumstances I think they are doing pretty well!
Christian Conservative on January 17, 2009 at 3:49 PM
Exactly how? Congratulations, that’s almost as lame as your “Republicans are Nazis comment”. Keep it up, you’re on an idiot’s roll…
Dreadnought on January 17, 2009 at 3:50 PM
Bush ran this economy into the ground, how many banks do you remember failing during the Clinton years, genius?
Noneya on January 17, 2009 at 3:54 PM
No. Liberal social engineering did that. Bush didn’t fight the liberal idiocy nearly enough, but this problem is all thanks to idiot liberals.
I remember 6 trillion in illusory wealth disappearing from the NASDAQ. What do you remember?
Oh. Never mind. You’re a lib. You have no memory.
progressoverpeace on January 17, 2009 at 3:57 PM
his administration didn’t think that regulation was that great an idea, and let wall st. “get drunk” as the dry drunk prez himself said. as for clinton, the dot com bubble burst, sure, but his policies had nothing to do with that. either way your party is outta power the next 20 years thanks to your beloved president hooverrrr errr i mean shrub
Noneya on January 17, 2009 at 4:01 PM
In general, regulation is not that great an idea. It should be used as sparingly as possible.
Not uite. I know you won’t understand this, but I’ll say it anyway:
Liberals forced the mispricing of risk in the sub-prime loan sector, in order to alleviate their crushing illusory guilt (and to help get votes). But, as anyone with a brain knows (which cuts liberals out, to start) mispricings in markets cannot be quarantined to some small area that someone wants mispriced. Arbitrage quickly spreads the mispricing throughout the market – and the debt market is HUGE. This is what led to the many dislocations between debt pricing and value, which is what brought us to this point. Thanks, idiots.
He was wrong.
Interesting, because that was a good deal of what fueled his “economy” (that and the total waste of the idiotic “peace dividend”), and Clinton claimed credit for it all.
Huh? BHO will kill the US, so talk about 20 years into the future of the US is quite silly. You people will totally tie our monetary system to our economy (which Bush started) and then it falls together. Beautiful, morons.
progressoverpeace on January 17, 2009 at 4:13 PM
You might as well be talking to a wall, but it was a great attempt.
Ordinary1 on January 17, 2009 at 4:18 PM
Thanks. You’re right, but the liberals’ arguments need to be slapped down wherever we see them. And they need to be publicly shamed about their stupidity as much as possible, since libs are emotionally driven in their ideology.
progressoverpeace on January 17, 2009 at 4:23 PM
My family has also wondered how Circuit City stayed in business as long as they have. Their service is lousy.
We just had a bad experience with KB Toys. My son got a gift card for Christmas…and none of their stores are accepting them. I’d hesitate to purchase gift cards from any business at this point.
JannyMae on January 17, 2009 at 4:27 PM
Noneya,
The Congress has a lot, lot more control of the economy than the president does. Let’s see, during most of Clinton’s Presidency, the Republicans controlled congress. During the last four years (the economic meltdown), the Democrats have controlled congress. It looks as if the left is to blame to me. Stop hitting the straw man and put the blame where it is due, The Congress and The Democrats.
Theophile on January 17, 2009 at 4:32 PM
How could they get away with that? Sounds like stealing. “Give us $20 and we promise $20 worth of stuff for the card holder.” Isn’t that a contract? If they don’t honor the card how is that not stealing? Is there some super fine fine print?
Ordinary1 on January 17, 2009 at 4:37 PM
huh? The Democrats came to power in 2006, that makes 2 years, hardly enough time to clean up the mess by you Repugs for the prior 6 years. but hey your math skills are as good as your party’s legislative ones so you are in like company…
Noneya on January 17, 2009 at 4:38 PM
blasphemy! better keep this opinion to yourself at your klan rallies….
Noneya on January 17, 2009 at 4:40 PM
That was about the response I expected from you. Take your 3 shriveled brain cells and go cheer the idiot messiah.
progressoverpeace on January 17, 2009 at 4:46 PM
Your party drove this country into the ground, i will certainly celebrate the fact you guys are finally disgraced and out of power, hopefully forever.
Noneya on January 17, 2009 at 4:53 PM
Yes … you’ve already said that. Now, try to address some of the actual points I made to you.
progressoverpeace on January 17, 2009 at 5:02 PM
Janny, hate to say it but your kid probably isn’t going to be able to use that gift card. The reason for that is usually when a retail store folds and goes bankrupt(in this case a whole chain), the individual stores aren’t technically KB Toys anymore, they’re technically owned by a liquidation firm. Which is why a store in liquidation usually has a strict No Return policy and limits the means of pay (checks in particular, because of the time they take to process). The only thing I could possibly suggest is to see if KB has a catalog or website that you can order and use the card at.
doubleplusundead on January 17, 2009 at 5:33 PM
*sigh* meant to add that gift cards are a no-go for the liquidation firm because that contract was with the cardholder and KB Toys (or Circuit, or whoever), not with the liquidator.
doubleplusundead on January 17, 2009 at 5:35 PM
Maybe, but then if your hypothesis as to the reason is true, maybe not — you may only be the middle fish.
As for “Made in USA”, I’m a WalMart customer, and nothing in the clothing section is made in USA. Ditto for watches. Nothing. WalMart buyers are world-wide, and in some areas, the USA apparently doesn’t cut it price-wise.
We have (had?) a Circuit City and a Best Buy about equidistant from our house, and they were fairly competitive price wise, and I shopped at both. I’ll miss CC — especially when Best Buy raises prices as is done when there’s no competition. Those who’ve bought on the internet have yet to go through a return, I think — I buy there too, but nothing which costs $50 or $100 to ship back if I don’t like it — I buy a little insurance by buying those things locally.
unclesmrgol on January 17, 2009 at 7:19 PM
Those “gift cards” are actually debit cards issued by a bank such as Citi; the funds used to purchase the gift card are routed into the associated debit account. One way of looking at this situation is that you do not have a credit account with KB — you have a debit account with the bank backing the gift card. There are ways of finding out which bank is behind the gift card. They are the deep pockets in this transaction.
unclesmrgol on January 17, 2009 at 7:26 PM
I’ve read through the posts above and the theme of CC having a weird vibe and being clueless is very interesting.
I had exactly the same experience the time(s) I have gone there. I eventually ended up buying my flat screen TV there (2008) but only b/c they were having a sale that beat BB, or online retailers, literally by hundreds…and I checked EVERYWHERE.
The sales force, and management was clueless, I almost had to lasso them and hold them down to hand over nearly $2,000 to them, and it had a weird vibe in there that I remember to this day.
aquaviva on January 17, 2009 at 7:37 PM
Bought several items from C.C. Never had a problem.
The Last was a 50” Plasma. I found that C.C. offered
the best price . I never buy extended warranties.
Sears is the only store I consider that option.
The only dislike I had with C.C. is the Firedog BS.
That was way over the top in the fees they wanted.
Texyank on January 17, 2009 at 10:11 PM
Noneya on January 17, 2009 at 4:53 PM
I suspect you’ll now just hear a click and a dialtone. : )
Texyank on January 17, 2009 at 10:16 PM
Paco on January 17, 2009 at 11:11 PM
From this article
Circut City’s management was doing a bad job all the way up to the top of the company. Its failure isn’t the fault of the economy, as the company was going to fail even in a good economy. It just might have taken a little longer to get to this point.
Buford on January 18, 2009 at 3:07 AM
Here’s one problem with an internet sales tax. With the way state and local sales taxes are determined, the filing (and remitting) of such taxes can be a heavy burden on small retailers. Just hink of the jurisdictions to which such a small internet seller would have to remit: State, possibly city and county (in states like AZ, CO, IL, and MO, etc.), across the country. The record keeping and audit burden would be oppressive for small internet retailers. They’d have to hire a tax accountant to keep in compliance, i.e., determining the state and local taxability of various products such as clothing, food, etc. How would a small Oregon internet retailer know the sales tax laws of other states when Oregon doesn’t have a sales tax at all? And if the Federal government decides to impose a flat internet sales tax, the localities would never see a dime. (And you don’t think the Federal government would take a cut of state taxes collected just by virtue of them collecting the money?) Think of Texas, which has a state rate, yet the sales tax returns break down the sales (and tax collected) by every city, county, independent school district, and MUD which imposes an additional sales tax above the state rate. (On top of that, there is an extremely quick turnaround on sales taxes, with most states being 20 days, less if payment is by EFT, which, again, is a heavy burden for small internet vendors.) That’s one reason why there has been no agreement yet on internet sales taxes: The localities lose that revenue, revenue from which was passed by local law in the first place. For small internet retailers, there is also the issue of each states’ determination of Point Of Sale. For a large multi-state brick and mortar retailer, sales taxes are extremely complicated, more so when the retailer ships from a store to a location outside the store’s taxing jurisdiction within and without the state; it would be more complicated for a small internet retailer without the tax department support that a large retailer has. Sales taxes were originally based upon the location of the store, with the customer walking away with their purchase(s). Now, with shipping, it is extremely complicated. As for the audit issue for small internet retailers, you just know no slack would be cut by these jurisdictions (someone has to pay the salary of the local auditors). By the Government imposing a flat internet sales tax, they are overstepping the whole concept of Federalism, and states’ rights. I still don’t know where sales taxing of internet sales is headed, then again, neither does anyone else, and it’s been an issue for around a decade now.
RickZ on January 18, 2009 at 5:52 AM
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