Best Buy starts descent

The turnstile at which Circuit City handed in its ticket on a journey to extinction was, msot agree, the point at which is dumped all its loyal, knowledgeable staff and hired a bunch of cheaper people. The stores died a little inside that day, and managers who couldn't care less bred an atmosphere of defeat which hurried the chain's demise.

Capitalists never being the sort of learn from even the most recent of histories, Best Buy have decided to get rid of 1,000 of its most experienced staff and cut wages of 8,000 others. By up to fifty per cent.

The justification is "getting more people out on the shop floor" - although who Best Buy really thinks wants to be served by a demotivated and humiliated senior person busted down to sho floor level isn't entirely clear. But imagine the fun of shopping in the Magnolia Home Theater parts of the store, when the guy serving you is thinking "the amount of cash you've just spent there is equal to the pay cut I've just had forced on me." It'll be so much fun, right?

Want to buy a second hand brand, slightly damaged?

Given that Circuit City was a hole long before it closed all its stores, you might wonder who would be interested in buying the name and the brand. Systemax, apparently. That's the same people who picked up the CompUSA brand when that chain crashed, and have since been gingerly reopening stores under the name.

Which must annoy them that most empty Comp USAs still have their lights on at night, which means their expensive brand gets eroded a little bit each time someone drives by.

Still, they're quite keen to take on the values of Circuit City, too. It's probably given Systemax's interests in electronics they won't be overly bothered by the chain's CD business.

Circuit City unplugs

To be fair, I can't take much delight in the news that Circuit City is closing its remaining stores. That's despite having a really bad customer service experience in one of their stores just after Christmas. Like, really bad. British standards of service bad. It was kind of curious, though, that a company which needed all the love and support it could get basically treated people trying to buy things as if they were irritants.

The company management has signaled that there's no way back for them:

"We are extremely disappointed by this outcome. The company had been in continuous negotiations regarding a going concern transaction. Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company," said James A. Marcum, vice chairman and acting president and chief executive officer for Circuit City Stores, Inc.

It's a sad ending but the loss of a second major competitor in just over a year will presumably make Best Buy feel a bit more confident about its future.

How businesses fail

Consumerist has an interesting chart depicting Circuit City's fall from grace - on the day the remaining stores in the US chain files for protective bankruptcy. The first major mistake? Sacking 3,400 staff to replace them with cheaper replacements. When will companies learn that people who earn a little more usually do so for a reason, and while you can cut a few bucks off the wage bill, you're going to lose more by the drop in customer service.

Flicking off the Circuit: CC shrinks network

Anyone who has been in a Circuit City recently will probably have noticed the stench of death coming from the chain: the US electronics and entertainment store is struggling so badly, you can see it on the shelves. I'd assumed the nearest one to the bit of Denver I'm currently at - the Colorado Blvd branch - must have been earmarked for closure as the only way to explain the tired stock and the depressed-looking staff, but it turns out this is one of the branches that's been saved. What the 150 shops that are being wound down must be like, I shudder to think.