Circuit City Close to Boarding the Fail Train

[modeps]

It appears that Circuit City may be filing for bankruptcy pretty soon. Gamepolitics is reporting (http://www.gamepolitics.com/2008/10/15/circuit-city-facing-game-over):

We believe a Circuit City bankruptcy has become a question of "when" rather than "if." We now expect bankruptcy in 2009, perhaps as early as the 1Q. The wild card in the equation remains vendors. If one major vendor were to cut off Circuit City, we would expect others to quickly follow suit...

I guess opening one across the street from just about every Best Buy wasn't the smartest move.

[KlausFlouride]

BB better hope CC doesn't fold. It would be very bad for business and consumers all around.

[Sparky]

I blame Divx (http://en.wikipedia.org/wiki/DIVX_(Digital_Video_Express)). And Carmax (http://biz.yahoo.com/ap/080917/carmax_mover.html?.v=2). And stores that up until recently were dark, dark caves.

[KlausFlouride]

The sad thing is their new 'The City' stores are nice. So nice BB is copying CC displays and using them in their stores.

[JasonSuave]

Circuit City just opened up a "city" store literally a block from my house. I've been in there a few times now, and it's crawling with people.

At any given point of time, there are probably almost as many customers in "the city" as there typically are at a Best Buy - which is definitely saying a lot for Circuit City!

You can tell with those "city" stores that Management is putting out a last ditch effort to save the company. The only problem is they may have executed the plans too late in the game...

[drakkarim]

i liked the stores, but ever since their crappy rebate practices years ago, i've sworn them off. so in a way i'm glad they're reaping what they sowed.

that aside, i don't know why none of these stores compete on price. especially in the digital age when more and more (of the smarter) people shop online where they get discounts over retail prices and don't have to pay taxes.

[bskeillor]

In my area the BB's clearly have more people than Circuit City. I doubt I've ever been in CC when there has been more than 20 people. As far as the BB better hope CC doesn't fold comment, I'm not sure why BB wouldn't want them to fold. Consumers should hope CC doesn't fold, but I'm sure BB would be thrilled to have one less competitor on the block.

[Sammael]

I think a lot of these stores are going to start falling off. Best Buy has been sucking ass for the last year or so. I remember looking through circulars and seeing some ok deals on occassion. Now they are advertising possible ass-rape in their Sunday flyers.

They are getting cocky. Any time a retail chain starts getting like that, the ship will start sinking eventually.

Maybe I'm wrong, but that's how I see it.

CC was always a dump in my area. Their employees seemed lost and lazy most of the time... nearly every time I went there to buy something, there was some kind of hassle...

EDIT

As far as why BB wouldn't want them to fold, the close out sales would impact their bottom lines.

[Valkyrist]

i liked the stores, but ever since their crappy rebate practices years ago, i've sworn them off. so in a way i'm glad they're reaping what they sowed.

Exact same thing with me. Those rebate scams, and they were totally scams, made me never set foot in a CC again. Havn't even given them a thought for years now.

[DigitalFirefly]

Circuit City > BB in my area. What happens to the warranty I bought on my TV is CC goes under?

[KSmitty]

Damn I would hate to see that. I love CC when it comes to Black Friday, they always have better deals than Best Buy. I'm now worried about my TVs warranty too, ahh shit.

[pdeupree]

I'm not sure if it's still the same way, but the thing that unsold me on Circuit City was the fact that the people that worked the floor worked commission, so they didn't have check out registers. Instead you had to find someone on the floor to ring you up. If they were busy it became difficult to pay and get out of there. If they were not busy they would be more aggressive since each person wanted that sale.

[Darkon]

They haven't been commission for about 6 years now, I was one of the few then that didn't get cut by their mass layoff/firing and put in about 7 years there.

One thing that bothers me is how everyone always has a problem with when Circuit was commission, but now complain of never getting competent and attentive help. Back when I was commision (at least at my store) just about no one went unhelped, associates knew what that where talking about and rarely BS'd the customer simply because if what they sold was returned they lost the money from that sale.

Now that they listened to the customer and did away with commision they can't afford to get appropriate help hired (regardless the age of the hired help, another thing that bothers me is those who point out age as a problem), when your paid $10/hr you give $10/hr help. With commision you could easily double that and there where a few that normally tripled it and could afford to live while working there. Now the only people there a just looking for supplemental income and when a job is expendable most would treat it as such.

As for the warranties, unless they changed it Circuit contracted out to GE for their warrranty services so warranties should be fine.

[pdeupree]

I'm the type that figures out what I want before going to the store (so I can read reviews and opinions on the item). So the Best Buy system where I can just walk in, go straight to what I want, go straight to a register, and get out works for me. It is starting to get a bit annoying there now, however, since they are plugging some product replacement plan with every item you buy now.

I will say, though, that before Best Buy got their Magnolia setup, Circuit City was better in terms of being able to find higher end electronics.

[Infinity]

I'd hate to see CC go. Everyone needs competition to keep the marketplace competitive and the deals headed our way as consumers.

I've bought far more new and clearanced video games from CC than BB. Granted these are commodities, not big-ticket things. I almost always see CC doing $10 gift cards with selected new games and not BB.

Like anywhere else today you can't depend on store staff to know anything about the product, especially if it's a technical product. While it would be nice if they did, that's not really their job. Their job is to know just enough to help you find something to solve a problem and work the mechanics of operating a retail establishment, and that's why they're paid what they're paid.

With the internet at your disposal there's no excuse for not doing your homework or, better yet, getting a friend to teach you how to do homework on the features of something.

[JasonSuave]

ah the commission debate.

I worked at circuit city about 8 years ago, when most of their sales staff was on commission.

From a customer's standpoint (10 years ago), it did suck to be hounded by the sales people at Circuit city. But on the other hand, you got service far better than you would at a Best Buy. Why? Because the people who sold on a commission knew all of the products and features, and knew exactly what type of product to put in the customers hand. The salesman knew that if the product got returned, they'd lose all of their commission for the sale. Did the commission shove too many products down customers' throats? Probably, but at least it generated FAR more sales for the store.

From the corporate standpoint, it was a HORRIBLE move for circuit city to axe the commission structure. Circuit City said "hey, Best Buy isn't doing commission. Let's try to mimic their model." What Circuit City didn't realize was that Best Buy built up their model WITHOUT employee commission... whereas Circuit City's business model was build on the commission structure.

[Pluvious]

Darkon and JasonSuave hit the nail on the head. They both understand why the company is failing now. When I was there (almost 15+ years ago) the commissions kept us all in line. We didn't want that stuff coming back so we where sure to get the RIGHT product to customer. Back then we had actual TRAINING on how to sell and we bothered to learn about the products so we could explain them to the customers. I remember when CD players first came out and the whole 2x vs. 4x over-sampling. I used to know each product by reading the manual when we put it up on the shelf. We used to pride ourselves on how much information we knew. We could explain the difference between Dolby C and B on tape decks in fact!

Those days are looong gone.

[JasonSuave]

When I worked at Circuit City, the average rate of pay for all commission-based employees was $16.50/hour for our store. Some people where getting as high as $33/hour, and some as low as $6.75/hour - it all depended on how good of a salesman the person was.

But let me tell you... when the whole store was on commission, EVERY sales person was working every single customer in the store. They sold tons more product protection plans (which were almost 100% gravy for the company), and brought in at least 3x more in actual revenue than any Circuit City employee today.

The only problem now is that since the Circuit City financials have been steadily declining for the last few years, the investors are too tied to their bottom line to ever introduce the idea of a commission-based structure. Thus, Circuit City will continue it's slow path toward bankruptcy.

My personal opinion is that in the next year or two, circuit city will shut down at least 90% of their stores, leaving only "the city" locations open. Then they will be able to garner some more investors to "rebuild" from there.

[ElectricMonk]

BB and CC are neat and all but usually only useful for checking out products before you buy them online. You don't have to worry about Best Buy having no competitors when the internet is around.

[Sammael]

Oh, as a side note - I worked at a BBY about 4 years ago for almost 2(?) years. The people who worked in the different departments were all self-taught in the items they were selling. No on-job training. I explained how a router worked in my interview and the manager cut me off half way through and said I was hired.

There is no on the job training that really pertained to the products you were selling. All they ever tried to teach you about was the service plans and geek squad packages.

I can't recall how many botched sales I had to fix that other sales people sent out the door that were horribly wrong. BS'ing a customer to get a sale is pretty stupid when they know where you work. I never understood how some of these idiots didn't get that these people might just come back to kick your ass...

[Lutheran]

Can I then stop making the payments on my circuit city card? :)

[LilAbner]

Circuit City > BB in my area. What happens to the warranty I bought on my TV is CC goes under?

I can't speak for CC, but when I worked for BB they had a third-party underwriter for their service contracts. More than likely you'd just be referred to a different service center.

[whearn]

The difference between Best Buy and Circuit City for me... pressure.

When I head into Best Buy, if I pick up a representative it's easy to tell them, I'm just looking I'll come grab you when/if I need you. When I step into Circuit City the representative just won't get off my heels.

I asked the Circuit City representative that "helped" me about this the last time I was in looking at LCD TVs. I asked if they work off commissions to which he answered "no". So, when I asked why they seem to follow me until I leave he admitted "well the more I sell the more time I get scheduled to work". Pretty brutal. Now I understand why I can't seem to shake them.

[KlausFlouride]

They haven't been commission for about 6 years now, I was one of the few then that didn't get cut by their mass layoff/firing and put in about 7 years there.

One thing that bothers me is how everyone always has a problem with when Circuit was commission, but now complain of never getting competent and attentive help. Back when I was commision (at least at my store) just about no one went unhelped, associates knew what that where talking about and rarely BS'd the customer simply because if what they sold was returned they lost the money from that sale.

Now that they listened to the customer and did away with commision they can't afford to get appropriate help hired (regardless the age of the hired help, another thing that bothers me is those who point out age as a problem), when your paid $10/hr you give $10/hr help. With commision you could easily double that and there where a few that normally tripled it and could afford to live while working there. Now the only people there a just looking for supplemental income and when a job is expendable most would treat it as such.

As for the warranties, unless they changed it Circuit contracted out to GE for their warrranty services so warranties should be fine.

GE is in the tank too.

[KlausFlouride]

Can I then stop making the payments on my circuit city card? :)

Only if you want Tony the Leg Breaker to stop by your home or place of business and 'collect'.

[ScottBravesFan]

I worked for Circuit City back in 2004 and their management was awful. They had the most ass backwards way of doing things. They also didn't pay shit. I got $7.50 an hour and that was because I was in college working my way towards a computer science degree. The people that worked in games and CDs got $6.00 an hour. It kind of sucks that Circuit City is going to go out of business because I met my wife there when we both worked there but it's not surprising. When you hire bad management your company is going to go under.

[ScottBravesFan]

The difference between Best Buy and Circuit City for me... pressure.

When I head into Best Buy, if I pick up a representative it's easy to tell them, I'm just looking I'll come grab you when/if I need you. When I step into Circuit City the representative just won't get off my heels.

I asked the Circuit City representative that "helped" me about this the last time I was in looking at LCD TVs. I asked if they work off commissions to which he answered "no". So, when I asked why they seem to follow me until I leave he admitted "well the more I sell the more time I get scheduled to work". Pretty brutal. Now I understand why I can't seem to shake them.



They didn't work on commission but they keep track of your sales and how many protection plans you sell. If you are aren't meeting your quota for the hour you will get in trouble. Eventually you will get less hours at work and eventually you will get fired. They were always bitching about selling that stupid protection plan when I worked there. Even if you sold a lot of product they didn't care, they wanted to see protection plans. And I understand since that is all profit if nothing happens to your product.

I never shop at Circuit City now we have a Best Buy in town and Best buy is a million times better. Plus Product protection plan is the shit. You buy a TV, it goes out, they give you a new one. I like that.

[Sammael]

Can I then stop making the payments on my circuit city card? :)

Not even close.

Debt like that gets picked up by another bank in the case of the original lender folding.

If you refuse to pay in a case like that, you will damage your credit pretty badly. Sooooooooo not worth it.

[gnober]

i always shopped in both and bought from whichever store has the lower price.

side note: when you are a salesmen shouldn't you know what you are selling? similarly, if you are a waitress shouldn't you atleast know what the food menu is about? commissions or not you simply must know the product you are trying to sell.