[59], On January 10, 2009, it was announced by a company spokesman that Circuit City needed a buyer by January 16, 2009, to keep from shutting its doors due to an approaching deadline set by the court and creditors. During its heyday in the 1980s and 1990s, Circuit City was the second-largest U.S. electronics retailer after Best Buy. Legal Statement. Samuel Wurtzel served as president of the company until 1970 and remained the chairman until 1984. Bankruptcy protection, filed on Nov. 10, became the only option. The plan was to open stand-alone major appliance stores, but later that plan was dropped. The problems began a decade ago, when Circuit City failed to secure prime real estate its out-of-the-way locations were often just inconvenient enough to tempt customers to head to other retailers, like Wal-Mart. Circuit City also had hoped to make up for its diminished product margins with its service and installation business called Firedog, which opened in 2006 - four years after Best Buy purchased the similar Geek Squad service. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Advance Local. [2][3] After multiple purchases and a successful run on the NYSE, it changed its name to Circuit City Stores Inc. CarMax was spun off from Circuit City in a tax free distribution to shareholders in October 2002 to allow both companies to grow and be valued independently. Circuit City operated more than 1,500 stores across the United States and Canada at its peak. News provided by The Associated Press. Community Rules apply to all content you upload or otherwise submit to this site. A total of 43,000 people lost their jobs as a result of the companys collapse. In 2007, a new 20,000-square-foot (1,900m2) store format was introduced as "The City" and designed to eliminate previously under-utilized space. ", Howard waxes nostalgic about the jobs being lost here and the store itself. The silver lining for consumers anyway may be discounted goods at the 155 outlets that the chain announced late last week it would close. KEYES: Even though the store was virtually picked clean, Tim Young said there were some good deals. By late afternoon on Nov. 10, a U.S. bankruptcy judge had granted the company permission to borrow up to $1.1 billion, which it will use to buy new inventory and pay workers. Systemax, Inc., in April 2009, signed a stalking horse agreement for $6.5 million, which was an initial offer for the bankrupt Circuit City's assets. But its long-term outlook remains bleak. Circuit City is a well-known consumer electronics retailer in the United States. [15][16] The new stores featured the "red tower" entrance that ultimately became a trademark of the company. To save money, it stopped paying commissions to its sales force and then fired 3,400 of its most experienced sales people. Bankruptcy protection, filed on Nov. 10, became the only option. Many of these stores, however, did open in 2008 and operated for only a few weeks before closing. All rights reserved. display: none; Many of the stories themselves were also out of date. [77][78] Circuit City was originally set to reopen in June 2016,[79] but the postponed relaunch was announced at CES for February 15, 2018. By pushing the big box concept in the 1990s, Circuit City also evolved into a new concept of mass retailing automobiles by building big lot inventories and letting customers select exactly what they wanted by make, color and accessories. Mr. STEVEN TIM YOUNG: I got (unintelligible). He bought nine copies of an online multiplayer game called "Team Fortress." Later, Circuit City plans to sell products in kiosk and through a store-in-store concept. [49][50] On November 7, 2008, Circuit City laid off between 500 and 800 corporate employees from its Richmond, Virginia headquarters. The store had already been fleeced of all its inventory, and a makeshift sign outside the store offered only fixtures. Systemax bought the Circuit City name, trademarks, and e-commerce website from bankruptcy court. This made it more difficult for them to compete with Best Buy which had a more substantial presence in urban locations with higher foot traffic. Ultimately, the hobbled credit market and consumer worries proved insurmountable. WebGarfield Heights - City View Center (opened 2006, closed 2008) Columbus - 1881 Hilliard Rome Road - opened 2007 as part of new Tanglewood Plaza, closed 2009 and later became Hhgregg (and now Ross Dress For Less). Circuit City suffered from complacent management who also made poor decisions. In 2000, the company opened its first store in the United Kingdom. In the aftermath of the recession of the 2000s, the retail chains Circuit City, Radioshack, and others failed primarily because of their reliance on low-cost, low-margin sales channels. 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. The offering was managed by Morgan Stanley and Goldman Sachs, and raised more than $400mm for a 20% interest in the company, with Circuit City retaining the remaining 80% ownership. Best Buy is still a thriving business today, but Circuit City closed its doors in 2008 as a result of a terrible financial collapse. This is an American success story that stands out. In April 2004, Circuit City announced its purchase of Canadian retailer InterTAN. In 1986, Circuit City purchased the The Sound of Music chain. The company had filed for bankruptcy protection and was unable to find a buyer. The company would grow to over 700 locations and $12 billion in sales as a result of its acquisition of Circuit City Stores Inc. Alan Wurtzels research, Good to Great to Gone: The 60 Year Rise and Fall of Circuit City, offers an intriguing look at how the city changed from a success to a failure. Circuit City Stores announced Monday that it will close 155 stores across the country, including the branches at 3761 State St. in Santa Barbara and 1535 South Bradley Road in Santa Maria. Circuit City, here on Broadway and 86th St. in Manhattan, shut down for good on Sunday. Circuit City was a star, not just among retailers, but among all companies. You could blame it on the bad economy or decreased consumer spending which played no small role but the real culprit is good old-fashioned bad management. [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. The companys success can be attributed in large part to its innovation, which includes the development of the first consumer electronics superstore, The Wards Loading Dock, in 1974, and the conversion of its audio stores to full-service consumer electronics stores under the name Circuit City in 1981. WebCircuit City superstores, which sold both electronics and appliances, grew swiftly, from eight in 1983 to 53 by 1987, in addition to the companys 37 smaller electronics-only stores. ", He's not going home with much to remember his final trip. In January 2010, the main Circuit City headquarters building was put up for sale. These locations were owned and staffed by Verizon Wireless. Richard Schulze founded Best Buy in 1966 at the age of 22. Former CEO Alan Wurtzel, son of Samuel, would later note that, We thought we were smarter than anybody. Please enter valid email address to continue. A store manager declined to comment about the retailer's last day in business. Many previously commissioned sales associates were offered new positions as hourly "product specialists", while 3,900 salespeople were laid off, saving the company about $130 million per year. What Are The Perks Of An Unsecured Business Credit Line? "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. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. [51] On November 10, 2008, Circuit City filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia. 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. The demise of Circuit City is a cautionary tale in complacency, poor strategy, and bad 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. A patron exits a Circuit City store on March 14, 2005, in Manassas, Va. Management was not frightened by the emergence of competitors such as Best Buy, Costco, and Kmart. And more than 34,000 employees, some who worked through the liquidation announced in January, will be jobless. So, what went wrong? [23] One new store in Jacksonville, Florida incorporated the new design and twenty-five existing Florida stores were remodeled to this format.[23]. The demise of Circuit City is a cautionary tale in complacency, poor strategy, and bad Circuit Citymanagementmade several inexplicably poor decisions in the years leading up to its bankruptcy. Circuit City went bankrupt in the 1970s before being reorganized and renamed. Shopping carts, store displays and even check-out stands were for sale, although few customers streamed into the two-story space. } Nine months later, it seemed that Cohan had been vindicated. Circuit City closed its doors for the last time Sunday night after 60 years in business. The company also understood that as electronics became cheaper and more widespread, consumers no longer needed a salesperson to help them with their purchases. 2019 TIME USA, LLC. After it underwent a rebranding and introduced the newer Horizon store format in the early 2000s, Circuit City left older stores unrenovated. This is an American success story that stands out. Get The Right Software To Manage Your Business. [49] [50] On November 7, 2008, Circuit City laid off between 500 and 800 corporate employees from its Richmond, Virginia headquarters. [72][73] Systemax relaunched the CircuitCity.com website on May 22, 2009, as an online retailer of consumer electronics. How To Answer The Common Interview Question: How Do You Handle Criticism? Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy. Around the country, stores once full of televisions, stereos, computers and other consumer electronics had little merchandise left on the last day of business, with many locations selling store fixtures like shelves and other odds and ends. [7][8] After developing a long range plan for the company in 1973, construction began on a distribution center and new corporate offices building at 2040 Thalbro Street (named after Thalhimer Bros. Department Store) in Richmond, Virginia and in the extra space, "Wards Loading Dock", its first warehouse showroom opened on May 1, 1975. Circuit City, here on Broadway and 86th St. in Manhattan, shut down for good on Sunday. Cellular phones were a major focus of the business since all major carriers were sold until the exclusive agreement with Verizon Wireless in 2004. Walk through the automatic doors into what was once a store chock-full of TVs and stereos and bustling red-shirted associates and you feel like you're in the wrong place. [24] The new space allowed them to sell Nintendo, Sega, and eventually Xbox games after the agreement ended. 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. There are a lot of cables and wires, and lots of copies of the book, Digital SLR Cameras and Photography For Dummies marked down from $30 to $2.99. The first of these replacements occurred in Knoxville, Tennessee; Charleston, South Carolina; and Hampton, Virginia. The big question now is whether Circuit City will go out of business altogether. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. In the early 2000s, Circuit City was one of the largest retailers of consumer electronics in the United States. This ended, after 63 years, the use of the Circuit City brand name.[76]. Language links are at the top of the page across from the title. (Lombard for News). Largest North Texas Retail Leases Ranked by Lease Category That created an opening for Best Buy, now the top electronics chain in the U.S., to surge ahead. Trending News So, what went wrong? The Theranos Fraud In A Nutshell, Why Hertz Went Bankrupt? 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. Families with toolboxes disassembled the store's racks and stands. WebCircuit City is also one of American retailings great fail-ures. Circuit City's stores will all be closed as of Sunday night. Circuit City went bankrupt in the 1970s before being reorganized and renamed. / MoneyWatch. This move alienated customers and hurt sales. Under an exclusive agreement with Sony, the only games that had been sold at the stores were PlayStation games. IBM Watson will serve as a personal shopping assistant online. If it had adapted, it might have ended up like its chief rival, Best Buy, which in August reported both increased sales and a quarterly profit of $200 million. How To Do Attract New Customers To Your Business? The selling floor was enlarged with lower sight lines and the race track was removed. [90] The company was in charge of designing product displays and other electronic services for Circuit City. First, the company made a strategic mistake in As a child of an immigrant I have witnessed my father struggle to get informed about managing his small store so this blog is dedicated to informing and educating small business owners. Circuit City has been a major player in the market since its inception due to its willingness to experiment and customer focus, which has helped shape the electronics industry. Best Buy was the most significantthreatto Circuit City, largely because it offered a better store experience. Systemax consolidated with TigerDirect in November 2012, and the Circuit City brand name ceased to exist 63 years after its inception. [54], In bankruptcy court, Circuit City was approved to borrow $1.1 billion to finance operations while restructuring. "Last night when we were here, they were playing soccer and enjoying their last evening of being in the store alone," she says. The plug is finally expected to be pulled on the unwinding of Circuit City Stores Inc. A total of 43,000 people lost their jobs as a result of the companys collapse. In November 2008, Circuit City closed over 150 stores and laid off 17% of its workforce. KEYES: But on this trip she says there were no bargains to be had. It is not uncommon for employees to lose their jobs as a result of the store closings, but those who worked there will always remember the company fondly. He picked up the copies for $1 apiece and planned to send them to other members of his online gaming group. However, by 2009, the company had filed for bankruptcy and ceased operations. Wurtzels Electronics was founded in 1949 by the late Samuel Wurtzel and pioneered the electronics superstore format in the 1970s. Visit our website terms of use and permissions pages at www.npr.org for further information. The first locations opened in Baltimore, Maryland; Richmond, Virginia; and McLean, Virginia in 1989. It was purchased by Maytag Corp. in 1988. 2023 Advance Local Media LLC. 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