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The Fall of Circuit City Stores
Sumit singh
Why did all three CEO failed?
Why did circuit city collapse
so badly?
McCollough action of stopping the selling of major appliances which resulted in closing
of 6 distribution centers and eliminated 1000 jobs
Circuit City failed to secure prime real estate — its out-of-the-way locations were often
just inconvenient for customers
The "real culprit" behind Circuit City's collapse is bad management
The expensive Store remodeling program
Replacement of 3400 store employees with lower paid workers
Oct 2008 announcement to liquidate 155 US stores let to black listing of the company
The closing of small stores and elimination of many jobs
Circuit city have to
choose better
locations for their
stores in order to
engage more
customers
There should be
proper HR practices
and the miss match
between
management and
lower employees
should always be
avoided
We can conclude
that the decision of
best buy and
remolding acted in
the destruction of
the company
They should focus
on more web
presence so that
customer could be
more known with
the products
The company has
already been in a
great depth, so
they can now focus
only to sell of all
the major stores to
repay back
Exhibit 2a Operating
profit of $123 MN
increase to $507 MN in
fiscal 1989
Circuit city operating
profits which were highest
in fiscal 2000 began to
decrease and dropped to -
$6mn
Sweeping actions by the
CEO McCollough like
restore remodeling
program , exit of smaller
stores ,relocation of 24
major stores
The 2004 expansion in
International market by
acquiring entertain a chain
of 174 outlets help to
increase in operating profit
from 143% to $211MN
(Exhibit 2)
The continuous decline
even after Games
Amarcum became the
CEO circuit city reported a
net loss of $249MN
Super stores were
between 30000 and
40000 sq. feet in size,
rapidly reaching 96 super
stores and 23 regular
stores by 1989
Replacing full time workers with 2100 new associates on an hourly wage scale which
created conflicting objectives among workforce
Circuit city weakening financial results and low stock price made the business attractive
for potential take over ( Exhibit 1)
As Best Buy took off, Circuit City became merely reactive and not innovative
The awarding of bonuses to top executives EMID declining sales and profits
The late October 2008
decision to liquidate 155
US stores created a Depth
of $ 2.3 BN and sales fell
43 to 50% ( Exhibit 2g)
Recommendation
Problems
Situation analysis

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Fail of circuit city infographics

  • 1. The Fall of Circuit City Stores Sumit singh Why did all three CEO failed? Why did circuit city collapse so badly? McCollough action of stopping the selling of major appliances which resulted in closing of 6 distribution centers and eliminated 1000 jobs Circuit City failed to secure prime real estate — its out-of-the-way locations were often just inconvenient for customers The "real culprit" behind Circuit City's collapse is bad management The expensive Store remodeling program Replacement of 3400 store employees with lower paid workers Oct 2008 announcement to liquidate 155 US stores let to black listing of the company The closing of small stores and elimination of many jobs Circuit city have to choose better locations for their stores in order to engage more customers There should be proper HR practices and the miss match between management and lower employees should always be avoided We can conclude that the decision of best buy and remolding acted in the destruction of the company They should focus on more web presence so that customer could be more known with the products The company has already been in a great depth, so they can now focus only to sell of all the major stores to repay back Exhibit 2a Operating profit of $123 MN increase to $507 MN in fiscal 1989 Circuit city operating profits which were highest in fiscal 2000 began to decrease and dropped to - $6mn Sweeping actions by the CEO McCollough like restore remodeling program , exit of smaller stores ,relocation of 24 major stores The 2004 expansion in International market by acquiring entertain a chain of 174 outlets help to increase in operating profit from 143% to $211MN (Exhibit 2) The continuous decline even after Games Amarcum became the CEO circuit city reported a net loss of $249MN Super stores were between 30000 and 40000 sq. feet in size, rapidly reaching 96 super stores and 23 regular stores by 1989 Replacing full time workers with 2100 new associates on an hourly wage scale which created conflicting objectives among workforce Circuit city weakening financial results and low stock price made the business attractive for potential take over ( Exhibit 1) As Best Buy took off, Circuit City became merely reactive and not innovative The awarding of bonuses to top executives EMID declining sales and profits The late October 2008 decision to liquidate 155 US stores created a Depth of $ 2.3 BN and sales fell 43 to 50% ( Exhibit 2g) Recommendation Problems Situation analysis