I suspect that nobody’s really surprised that Circuit City has finally bitten the dust. The fading electronics chain had been in a death spiral for quite some time, and all the cost-cutting in the world couldn’t save it in the end. While a dreadful economy contributed to its downfall, Circuit City’s real problem was getting stuck with bad management that ultimately drove the company out of business.
Let’s backtrack a bit. Back in March 2007, Circuit City fired more than 3,400 experienced sales people and other staffers simply because they were making too much money. Management then hired inexperienced, lower-paid workers to take their place. Bad move. Really bad move. This short-sighted decision may have looked good to then-CEO Philip Schoonover, who collected a cool multi-million bonus that year for his cost-cutting brilliance, but I’m convinced that it drove shoppers elsewhere. It certainly did in my case. (An aside: The Wall Street Journal named Schoonover the worst CEO of 2008 for his managerial bungling.)
Over the past 18 months, my visits to Circuit City stores in my area weren’t a lot of fun, and ultimately I vowed never to shop there again. One time, a few months after the layoffs, I went to a nearby Circuit City to buy a laptop case that had had been featured prominently in the store’s newspaper ad that week. But the case wasn’t on display and the clueless sales dudes — who were busy doing something online — had no idea whether the item was in stock. They weren’t too keen on checking the back room or phoning nearby Circuit City stores to check on their stock either. “Uh, you could buy it online, I guess,” one of the slackers finally told me. Which I did — from another retailer.
Another time I went to a different Circuit City during the 2007 holiday season. The store was woefully understaffed. Only one register was open, and a long line of irate customers trying to buy stuff snaked around the store. The computer system was down too, but nobody working that day seemed too concerned.
These are anecdotal incidents, I know. But I suspect they weren’t uncommon. In my case, they made me not want to shop at Circuit City anymore. The employees weren’t rude, mind you, just indifferent. They didn’t understand Customer Service 101, and that’s management’s fault. The unfortunate result is that 34,000 Circuit City employees will soon be out of work.
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