Circuit City is filing for bankruptcy. This should surprise no one. The beleaguered electronics retailer recently announced they are closing more than 150 stores and laying off thousands of workers just before the Holidays. How many? Over 7,000 workers will find themselves without a job by Christmas. More cuts are expected to be announced as the reality of the situation unfolds.
You may recall that last year around this same time I participated in a boycott against Circuit City in protest of management firing 3,400 top salespeople. They would allow them to return after 10 weeks (The holidays) to reapply for their former position at lower pay. The decision by management was an incredible insult to the workers and one that will go down in history as a mean spirited dismal failure.
Circuit City was never able to recover from managements blunder instead their sales plummeted, customer satisfaction suffered and their reputation for not caring about employees persists.
In the last 12 months customers have complained about returns not being accepted and store warrantees not being honored. Store warranties are a lucrative part of any electronics retailer business model. With experienced salespeople replaced with less experienced sales staff, sales of the warranties collapsed.
The stock market and slowing economy dealt a final blow leaving management no choice but to capitulate. Sales this holiday season are expected to be the lowest they’ve been in decades. The problems are likely to spread to other companies like Hewlett Packard which is owed more than a 100 million dollars by the retailer. The value of commercial properties owned by Circuit City has also dropped.
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