Hmmm...just a thought. Perhaps if Circuit City stores weren't dumps (most in my area are dumps!) and they actually had stock when they were supposed to they might be doing a little bit better. As much as we may have issues with Best Buy, Best Buy stores, at least from my experience, are generally cleaner, better stocked and generally a better experience than Circuit City. When Circuit City scaled way back on their CDs, I scaled way back on my visits. When I do go to Circuit City though, I'm usually disgusted with the experience.

We have 2 locations in Lexington, an older location that falls into Walter's classification of dump and a newer location which looks newer. I can't imagine they'd close the newer one but I'll be interested to see where these closings occur.

One thing I've noticed about my local CC....there is rarely a crowd there. They have a pretty good selection of TV's but everything else is very average.

I was happy when I noticed a new CC going into a center about a mile from my home less than 2 years ago. Today I don't even consider stopping there.

The new model warehouse-less floorplan is a disaster for CD sales. Near me they still classify into Rap, Pop, Country etc., but the employees have given up on alphabetizing by artist (I'm not kidding). They place the incoming discs where ever they can find a spot to cram them into the vertical wire racks! In the racks the discs are packed too tightly to be flipped through. If it wasn't for the title stickers on the top edge of the jewel boxes, it would be impossible to shop the racks. Since the racks don't slant outward, you have to move your head down to see under the level above.

Add to that a 33% reduction in the number of racks/floorspace dedicated to CDs and it is just a waste of time not to drive on to a better run store.

I do miss the old Circuit City stores. They were the first store in our area to have listening stations where you could hear tracks from various CDs. I remember "discovering" Kirsty MacColl at one of these stations when Titanic Days came out. Also, you could sometimes find special edition CDs at unusually low prices. I picked up the "bamboo" Ultra Lounge sampler for about $13 some years ago, among other goodies.

Regarding the look of the stores, the ones in my area are all clean enough but I do hate those new racks for the CDs and DVDs. Some of the Borders stores have also gone with similar racks, and it seems like the first thing that goes out the window is decent alphabetizing.

For what it's worth, they just opened a new store in Tampa this week to replace a smaller store down the street. The new location is huge but (...you guessed it...) the CD selection seems to be about the same.

http://www.comcast.net/news/finance/ind ... ircuitcity

Circuit City to Cut More Than 3,500 Jobs
By MAE ANDERSON and ELLEN SIMON, AP Business Writers
51 minutes ago

NEW YORK - A new plan for layoffs at Circuit City is openly targeting better-paid workers, risking a public backlash by implying that its wages are as subject to discounts as its flat-screen TVs.

The electronics retailer, facing larger competitors and falling sales, said Wednesday that it would lay off about 3,400 store workers _ immediately _ and replace them with lower-paid new hires as soon as possible.

The laid-off workers, about 8 percent of the company's total work force, would get a severance package and a chance to reapply for their former jobs, at lower pay, after a 10-week delay, the company said.

The news of the layoffs came as a surprise to Rachelle Gouled, who earned about $7.75 an hour working on the sales floor at a Circuit City in Roseville, Minn. She said 10 people were laid off Wednesday at her store.

"For some of them, I could see them being OK without this job," she said. "For others, it was their only job."

Analysts and economists said the move is an uncertain experiment that could backfire for the chain. The risks: Morale could sink and customers could avoid the stores. Also, knowledgeable customer service is one of the few ways Circuit City can tackle competitors that include Wal-Mart Stores Inc., they say.

"This strategy strikes me as being quite cold," said Bernard Baumohl, executive director of The Economic Outlook Group. "I don't think it's in the best interest of Circuit City as a whole."

While other companies, such as Caterpillar Inc., have introduced two-tiered wage systems, where newer workers make less, firing workers and offering to rehire them at a lower wage is very rare.

"I don't think you're going to find too many examples," of this, said Ken Goldstein, labor economist for the Conference Board, a business research group. "That certainly has not been a trend we've seen."

Circuit City Stores Inc., the nation's No. 2 consumer electronics retailer behind Best Buy Co., says the workers being laid off were earning "well above the market-based salary range for their role." They will be replaced with employees who will be paid at the current market range, the company said in a news release.

"We haven't done something called (a) wage management initiative before," said company spokesman Jim Babb. "All companies at one time or another need to go through and make sure their cost structure works with market conditions."

Circuit City declined to say how much those laid off were paid and how much the new workers would make. Company spokesman Bill Cimino said it varies depending on the market.

The company's stock rose 35 cents, or 1.9 percent, to close at $19.23 on the New York Stock Exchange.

"The stock is up today on the news restructuring is going to help in short term," said Morningstar Inc. analyst Brady Lemos. "Longer term, they could face challenges."

Analyst Vivian Ma of CIBC World Markets said Circuit City sales suffered after it dropped commissions for its sales workers in 2003, and there's a danger the same thing will happen now.

Circuit City lost money in its most recent quarter and on Wednesday lowered its 2007 revenue guidance for the second time. A store in Falls Church, Va., started cutting hours after the Christmas rush ended, said Imane Eljacifi, a Verizon Wireless employee who has worked for about three months at a kiosk located inside the Circuit City there.

After the cuts, many of the employees, mainly teenagers, left for other jobs where they could get more hours.

"The Circuit City customers were wandering around and would start asking us for help," Eljacifi said. "That's what I've witnessed and I hate about the whole situation."

Customers at the store questioned the move.

"I don't think it's fair," said Hamilton Smith, an 88-year-old retired federal worker who had just purchased some batteries at Circuit City. "You need to give people a living, working wage." He said he would think twice before shopping at the company's stores again.

Circuit City's cuts come at a time when other retailers are trying to put more knowledgeable workers on store floors. Home Depot Inc., whose new chief executive is struggling to re-ignite sales growth at its stores, said it has raised pay to attract skilled tradespeople, such as carpenters and electricians.

Home Depot is adding 15,000 new jobs this year, according to spokesman Jerry Shields.

Circuit City's move, by contrast, "shows they're positioning for another tough year," said Timothy W. Allen, a Jefferies & Co. retail analyst. Not only will service levels at the store suffer, he said, but "you've lost 3,400 customers-slash-employees."

___

Associated Press writers Daniel J. Caterinicchia, in Washington, D.C., Zinie Chen Sampson in Richmond, Va., and Archie Ingersoll in Minneapolis contributed to this report.

Just once, I'd love to see a company/corporation launch a "wage management initiative" targeting the highest-paid CEO's - laying them off, and then offering to rehire them for a fraction for their previous salary.

Seriously, I have only been inside a Circuit City once or twice in my life, and I wasn't exactly dying to return. This latest "initiative" gives me even less of a reason to return and give them my business.

My former employer did that about six years ago. I wasn't one of the ones who took a cut there, but it shook up everyone's morale

I used to spend lots and lots at CC, but stopped almost four years ago when they rang up a DVD Burner at $20 more than the advertised price, and wouldn't honor the ad, even after I involved the manager. I've stopped in a couple of times since, if I was looking for a new CD that Best Buy didn't have, but they never do, so they haven't gotten my money...hell, probably since I bought my TV, right about 4 years ago.

Well said, Jeff!

Delta Airlines' CEO was in line to receive a multi-million dollar bonus once they emerge from bankruptcy. He has refused to accept it, and put the money into job placement and retraining programs for displaced Delta employees. IIRC, he's also only drawing a low 6-figure salary, unheard of for someone in his position

We need more like him.

Too bad it takes a bankruptcy for them to see the light.

Rick A.

Public backlash? I can only speak for myself but I know I will be taking my business elsewhere.

I might have to add my name to the list as well.

Aren't there any decent electronics stores left in the United States? I already avoid Beast Buy like the plague, and I really don't want to have to add Circuit City on my s***list, but when it comes to laying off people only to encourage them to re-apply for the same job at a lower salary... that's just not right.

By the way, did the CEO, CFO and or any other exec. take a pay cut at C.C.?

Yeah, when Hell freezes over. The American people better wake up!

Rick A.

I'm happy to go to Circuit City and buy their "loss leader" CDs, i.e., the stuff sold below cost out of the box to intice me into the store. That way, I'll actually be costing them money. Otherwise, they can forget it...

Just wondering if that $14.95 will give the buyer an *unlimited *number of songs for that cost. My kids d/l alot of music from iTunes, and $14.95 would be a savings for me.

But still, CC sucks for letting go of people like that. Why don't the execs take a paycut, they can afford it a lot easier than the working people ...

Circuit City tries to reinvent itself

By MICHAEL FELBERBAUM, Associated Press Writer
Mon Mar 10, 9:06 AM ET



RICHMOND, Va. - Dressed in jeans and black T-shirts and armed with touch-screen laptops, Generation Y employees at "The City" help customers choose the latest gadgets.

Far from its old "stack 'em high, watch 'em fly" approach, struggling electronics retailer Circuit City Stores Inc. hopes its smaller concept stores, widespread cost-cutting and new support services will spark a turnaround despite increasing competition and the faltering economy.

"We have a difficult economy, we have fierce competition and we're in the middle of some of the most difficult, deepest work in the transformation," Chief Executive Philip J. Schoonover said in an interview with The Associated Press.

Circuit City hasn't seen a quarterly profit since the second quarter of 2007 and lost more than it had expected in the third quarter of its fiscal 2008, which ended Nov. 30. Now, it anticipates reporting a "modest loss" in the fourth quarter, which included most of the crucial holiday-shopping season.

The nation's No. 2 electronics retailer, Circuit City is not faring well compared to No. 1 Best Buy Co., which reported a 52 percent jump in profits in the quarter ending Dec. 1. Circuit City has rejected takeover bids and seen several key executives leave over the past year. Then, late last month, a major shareholder proposed a clean sweep of the company's board.

Circuit City already has doubled its credit line to $1.3 billion, which Schoonover said gives it the liquidity to continue the turnaround "even if the economy doesn't support us or if competition gets tougher for a period." The credit also puts the company's large vendors at ease, he said.

Vendor relationships are critical because continued sluggish sales could lead vendors to tighten ordering terms or even demand cash from the company upfront, analyst Scot Ciccarelli of RBC Capital Markets wrote in a note to investors.

"The cash is used up and sales mathematically decline because there just isn't as much to sell," he wrote. "This is how even big retailers go out of business."

The biggest challenge now is to stand out in a highly competitive field, analysts said.

Circuit City has been "trying to play catch-up and (find) a way to be something that Best Buy isn't," said Stephen Baker, an analyst with market researcher NPD Group.

"If you can buy an iPod at Wal-Mart, Target, Amazon, Best Buy and Circuit City, there's no way to differentiate," analyst Chris Horvers of Bear Stearns said.

He predicted the new stores will produce higher returns because of their smaller size, which reveals the company's recognition that the smaller electronics of the future will need less selling space, especially as online content replaces DVDs, CDs and video games sold in stores.

Schoonover said changes in the television market — the Federal Communications Commission has mandated all broadcasters switch digital formats by next February — also will help drive sales.

"It's going to be a good year for our industry," Schoonover said, calling the switch to digital broadcasting the biggest growth opportunity since he went into consumer electronics 25 years ago. He came to Circuit City in 2004 from Best Buy, where he was executive vice president of customer segments.

Wattles Capital Management, which holds 6.5 percent of the company's stock, is not so sure. Wattles wants to nominate five members for Circuit City's 12-member board and oust all the current directors. Mark J. Wattles, founder of the Hollywood Entertainment video-rental chain, sees little good coming of Circuit City's restructuring and turnaround attempts.

The company's losses ballooned to $207.3 million for the three months that ended Nov. 30, compared with $20.4 million a year before. Its shares have traded between $3.47 and $19.60 in the past 12 months.

A slowing economy led Richfield, Minn.-based Best Buy to cut its 2008 outlook last month. But its profit was $228 million in the most recent quarter.

Analysts seem to be siding with Wattles.

"This is a good shake-up," Horvers said. "It gets the management team as focused as they possibly can be, and having an outside voice is a positive."

While electronics have become necessities rather than luxury items, Baker said selling them remains difficult.

Like I've said before, I'll give Circuit City another chance when they start actually stocking what they advertise. I've been burned by them too many times and I can't think of the last thing I actually purchased there.

The only use I have for CC is when presenting their circular somewhere else for a price match. Their CD section has been a joke for a few years now. It's actually depressing to have to wander through that place!

Are they going to change the name to Circuit Town?

*crickets chirping*

O.K. then...Circuitville?