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

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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