Is There Any Way to Save Circuit City? I’m Not Optimistic–But I Hope So

By  |  Monday, November 3, 2008 at 12:42 am

Engadget is reporting a rumor that that the venerable Circuit City chain is planning to shut down 155 of its stores, which would amount to about a quarter of its locations. If true, this is sad news for the folks employed at those outlets, not to mention the ones who like to shop at them. But it wouldn’t be a shock. For a long time, Circuit City’s very existence has been defined by the fact that it competes with the juggernaut known as as Best Buy, and it’s never found a satisfactory strategy for defining itself in an appealing, distinct way. Mostly, it’s felt like a Best Buy with less floor space and a skimpier selection of stuff, and service that was at best no better than Best Buy’s. Which is a recipe for irrelevance, long term.

It’s easy to forget that there was a time when Circuit City was the nation’s leading national electronics chain, and Best Buy was an up-and-comer, not an 800-pound gorilla. Actually, it wasn’t that long ago: Jim Collins’ book Good to Great, published in 2001, lavishes praise on Circuit City’s success and mentions Best Buy only once, in passing. But there’s no business that’s more fickle than retailing, and electronics is especially brutal–just ask CompUSA, Good Guys, RadioShack, or any of the other chains that have either gone out of business or suffered serious challenges in recent years. (And while I was writing this, I learned that Tweeter, a mainstay of my New England youth, is being liquidated.)

I can’t say I’m optimistic about Circuit City’s chances–its stock has fallen so far that it’s flirting with being delisted from the NYSE–but I would be pleased to see it figure out a way to turn things around. If Circuit City ends up with only a handful of stores or disappears altogether, it’ll leave Best Buy as the only truly national, truly full-service electronics retailer. And I’d much rather it had at least one strong competitor to keep it on its toes and pressure it to keep prices low. (Best Buy’s healthiest rivals all seem to be indirect competitors: the regional chain Fry’s, the generalist Wal-Mart, and the Apple Store.)

I’m not sure what I’d do if I somehow found myself as the CEO of Circuit City–if there was an obvious route to success, the company would surely have tried it by now. But I’d hope that there was a place for an electronics chain that offered a noticably superior shopping experience than most–better products more invitingly displayed, with savvier salespeople and smoother checkout. In other words, a sort of Apple Store that sold everything besides Apple-related wares. Given that Circuit City made headlines last year for firing its most experienced salespeople and replacing them with newbies, this doesn’t seem to be its strategy. But I’d love to see it, or somebody, try…


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4 Comments For This Post

  1. ryan Says:

    some things about circuitcity that i’ve not liked.

    1. computer section was never large/relevant enough.

    not enough parts, not a comprehensive enough software library

    2. low ceilings

    makes it feel cramped and constricted, and i’m not claustrophobic

    3. bad lighting

    skimp on lighting and it’s like shopping in a cave

    4. it’s just not busy enough

    i know they can’t help it NOW because there’s not many customers left, but it is a strange feeling when you’re the only one in that store, and you can’t just browse they are all expecting you to buy something…

    they need to crank the volume on all the displays, run some movies, some games, dial up the jams in the audio section, make it lively like an exhibition not hushed like a library

    5. entrance is cramped.

    wide entry on the side of a building is more inviting than a corner entrance. once you get inside you only have 90 degrees of available vision of where you can go, as opposed to a side door where your whole visual radius is taken up. it’s a psychological squeeze that makes the store seem even smaller. and again, i’m not claustrophobic…

  2. Jack Diederich Says:

    That’s creative destruction at work. Circuit City does things marginally less well than other stores and thems the breaks. I’ve bought TVs, games, and movies at Circuit City over the years but for those kinds of general things I’m as likely to go to Wal-Mart. CompUSA suffered a similar fate – it couldn’t decide what kind of store it was and did nothing well.

    If you want a good computer store check out MicroCenter. They stick to their specialization of computer stuff and do a decent job of it (the book selection is kinda meh but they devote 20% of their floor space to it). It is kind of a retail Fry’s.

  3. Tim Robertson Says:

    This is very old news. CC announced they were closing these store well over a year ago. They are, simply put, getting their heads handed to them by Best Buy. That, and they seemed to employ the most uneducated people, who from personal experience, knew less about the products they were selling than the customer walking in the door.

  4. Fact Checker Says:

    Tim Robertson is wrong. Circuit City did NOT announce they were closing these stores well over a year ago! This is NOT very old news in any way shape or form. These stores are closing NOW not one year ago.