Well, that was quick.
One week after announcing 155 store closing, Circuit City ties it all up in a nice neat Chapter 11 bow. It’s an extraordinary “my how the mighty have fallen” tale of how the leading retailer in its sector succumbed to hubris and was felled by an upstart (Best Buy) that changed the rules of how electronics are sold. Even as Best Buy took market share throughout the late 1990s and early 2000s, Circuit City management continued to believe, or to at least tell journalists and analysts, that its commissioned sales model was the best in the business. By the time someone from Best Buy was brought in, the damage was done. Appliances (big ticket sales) had been replaced by low margin pre-recorded media. A dying category. Customer loyalty had eroded and the chain’s reputation dimished. And still the leadership had a hard time seeing things clearly.
Greg Gilligan of the Richmond Times Dispatch said it all brilliantly. Yesterday, no less.
Can Circuit City survive and exit Chaper 11? Sure, bigger retailers with less vendor support have done just that. But it won’t be easy or quick, particularly in this climate. Now the story becomes who will unseat Best Buy as it succombs to size and ego?