|
|
Circuit City
Type Public (NYSE: CC)
Founded 1949
Headquarters Richmond, Virginia, USA
Key people Philip J. Schoonover CEO
George Danny Clark Executive Vice President & President of Circuit
City-Retail Stores
Industry Retail
Products Consumer electronics
Revenue $12.43 billion USD
Employees 46,000
Website http://www.circuitcity.com,
Circuit City (NYSE: CC) is a Fortune 200 company, and the third largest
consumer electronics retailer in the United States with over $11 billion USD
in sales[1], behind Best Buy and Wal-Mart. As of March 28, 2007, Circuit
City's domestic segment operated 643 Superstores and 12 other locations in
the U.S. Circuit City Superstores range in size from 15,000 to 45,000 square
feet (1400 to 4000 m²) and offer a large selection of brand-name consumer
electronics, personal computers and entertainment software. Circuit City's
international segment operated through over 800 retail stores and dealer
outlets in Canada. Circuit City's locations in Canada are operated by
InterTAN Canada Ltd which Circuit City acquired as of May 19, 2004. InterTAN
runs The Source by Circuit City (formerly Radio Shack) chain in Canada (some
of them now called La Source in Quebec) as well as THS Studio UpClose, and
G-Wiz.
History
In 1949, Samuel S. Wurtzel opened the first Wards Company retail store in
Richmond, Virginia, at 705 West Broad Street. By 1959 Wards operated four
television and home appliance stores in Richmond. The company continued to
grow and acquire more stores in other locations including Albany, New York;
Mobile, Alabama; Washington, DC; and Costa Mesa, California.
In 1984, the company officially changed its name to Circuit City and became
listed on the New York Stock Exchange. The company, who leased floor space
from the Zody's department stores as well as other department stores, began
obtaining retail stores and turning them into Circuit City Superstores. The
first of these replacements occurred in Knoxville, Tennessee; Charleston,
South Carolina; and Hampton, Virginia.
In 1990, Circuit City established the First North American National Bank to
operate their private-label credit card[2]. In 2002, Circuit City began
offering a co-branded Visa credit card. They sold both these operations in
2004 to Bank One (Now Called Chase Bank).
In 2003, Circuit City converted to a single hourly pay structure in all
stores, eliminating commissioned sales. Many previously commissioned sales
associates were offered new positions as hourly "product specialists", while
3900 salespeople were laid off, saving the company about $130 million a year
[3].
On February 11, 2005, a hedge fund headquartered in Boston, Highfields
Capital, offered to takeover Circuit City for $17 a share, arguing that
existing management had failed to maximize shareholder value. The offer was
rejected by Circuit City's board on March 7, but doubled its own share buy
back program. As of February 28, 2005, Circuit City held cash, cash
equivalents, and short term investments of $1.00 billion USD [4].
On June 27, 2006, it was announced that Philip J. Schoonover would succeed
W. Alan McCollough as Chairman of the Board of Circuit City Stores, Inc.
[5].
In August 2006, at a Las Vegas convention, the name for Circuit City's
upgraded in-store and in-home services crew was unveiled as "firedogSM."
firedogSM provides in-home, in-store, and online PC Services, Home Theater
Installations, and more.[6]
On February 8, 2007, Circuit City announced that it planned to close seven
domestic Superstores, and a Kentucky distribution center to cut costs and
improve its financial performance. [7]. News media reports also mention that
62 stores in Canada will close. [8] [9]
On February 23, 2007, Circuit City's announced that Chief Financial Officer,
Michael Foss, would leave the company. This unsettled investors and analysts
concerned about management turnover. "This represents the third departure of
a senior executive in the past six months, and the second departure of a
top-five executive in the past month" said Goldman Sachs analyst Matthew
Fassler in a client note. Chief Executive Office Phil Schoonover’s
"hand-picked team is turning over faster than we would like to see in a
turnaround situation." [10]
In a press release on March 28, 2007, Circuit City announced that they had
laid off approximately 3400 of their associates who were paid above the
salary range for their position in order to cut costs. Those positions will
be re-staffed with associates paid within the market range for their
position. Associates that were laid off due to the "wage management"
decision were provided severance and offered a chance to return after ten
weeks, at a market based salary.
Business model
In 2001, Circuit City introduced a new Superstore format which was much more
in-line with the "Big Box Retailer" store design than its prior layouts.
Newer stores have a brighter, more open sales floor aimed to more easily
allow customers to browse the merchandise. The format allows putting all
products, except those that are too large for a customer to carry
themselves, on the sales floor. In 2007, new store formats include a 30,000
square foot store aimed to eliminate previously under-utilized space.
Approximately one third of new store openings will be in a 20,000 square
foot store format to be utilized in smaller trade areas or as urban fill-in
locations.[11]
Circuit City has also developed, in partnership with IBM, its first online
virtual-reality store based completely within the 3D virtual world of Second
Life. The store was opened in December, 2006, and houses 3D representations
of actual product carried in stores. Online consumers can shop in the
virtual store much like they would in a real store. The Second Life virtual
store project was created as part of Circuit City's Multi-Channel initiative
to branch into other areas of retailing in addition to a standard store
environment.[12]
Domestic segment retail operations are overseen by the President of Retail
Stores. Domestic retail operations are divided into 2 divisions. The two
divisions comprise 10 regions which are under the supervision of Regional
Vice Presidents. The 8 regions comprise 67 districts, which are overseen by
District Managers who regularly visit stores to monitor store operations and
meet with Store Management. The Source by Circuit City is currently overseen
by Steven Pappas, President of InterTAN.
Domestic segment Superstores are typically staffed with an average of 56
full-time and part-time Associates including sales support personnel, such
as customer service associates, product specialists and stockpersons;
in-store technicians and installers; supervisors; an operations manager; an
assistant manager; and a store director. [13]
Superstore associates at Circuit City locations are all paid on a
non-commissioned basis.
Major products and services
Home Entertainment Equipment; Televisions; New-Generation DVD Players,
Receivers, Speakers, Entertainment Accessories
Imaging Equipment; Digital Cameras, Camcorders, PDAs, Cell Phones
Technology Equipment; Personal Computers (PCs), Laptops, Monitors, Computer
Accessories, Computer Software
12-Volt (Car Audio) Equipment; GPS, Amplifiers, Speakers, Subwoofers
Entertainment Software; Music CDs, DVD Movies, Music DVDs, Console Systems,
Console Games, PC Games
House Care; Vacuums, Air conditioners, Small Refrigerators
FireDog Service; Home Entertainment Installation, PC Checkup / Installation
etc...
Examples of services provided are narrowband, broadband, wireless telephone
service through an exclusive partnership with Verizon Wireless (while also
offering Virgin Mobile, foneGEAR and Amp'd Mobile), voice-over IP, extended
warranty programs, satellite radio, computer repair, in-store pickup, car
audio installation and in-home video installation.
Associates
At the time of its fiscal year 2007 Annual report, Circuit City had 43,011
hourly and salaried associates working in the United States, and 3,071
associates in Canada. Comparatively, in its 2001 report, Circuit City
operated the domestic segment with 53,302 associates.
Associates in both the domestic and international segment receive frequent
training through interactive E-learning courses hosted on the company
intranet known as ccity.com. The E-learning courses are developed by
DigitalThink. In addition to online courses, associate training tools
include training workbooks, and management-driven in-store mentoring.
Training includes developing selling skills, product knowledge with an
emphasis on new technology, customer service, and store operations.[14]
Initiatives
Multi-Channel In the company's 2007 annual report, Circuit City lists
Multi-Channel integration as one of its primary innovation initiatives.
Circuit City defines multiple channels as the different methods that
customers have of purchasing from the company; these methods include
shopping in a store, ordering on the phone, on the web, or from a catalog.
Circuit City places internet kiosks in its stores so if a product is out of
stock, a customer can order it online. The company has also launched a test
program that enables sales associates and shoppers in 10 stores in Boston
and 10 in Florida to use wireless tablet PCs to study product specifications
and compare products and prices from circuitcity.com as they walk through a
store. According to Internet Retailer magazine, "The merchant also has been
changing its entire business structure to break down barriers between
channels by investing in new or more call centers, catalogs and web-selling
technologies and changing the psychology of the company and its
employees.[15]"
Supply Chain Supply chain encompasses the organization and processes
involved in all of the steps between obtaining product from a vendor and
having the product in stock at locations for a customer to purchase. In
Fiscal 2007, Circuit City made improvements within its supply chain
organization to help identify and react to consumer demand in a timely
manner as well reduce the time between buying from a vendor and display of
the product at the point of sale. Circuit City has set up a subsidiary,
Circuit City Global Sourcing, Ltd (with offices in China, Hong Kong and
Taiwan), to assist in obtaining inventory to sell. Most Products are shipped
directly from manufacturers to the 9 Circuit City distribution centers.
Enhancements in Fiscal 2008 will continue to be made in areas such as vendor
relations, distribution and warehousing, inventory management, space
planning, and supply process re-engineering.[16]
Six Sigma In 2001 Six Sigma was introduced as an initiative within Circuit
City's annual report.[17] Six Sigma is applied to Circuit City's operational
side such as supply chain and distribution centers. Circuit City applies Six
Sigma methodology to its critical operational processes to measurably
increase customer satisfaction while driving down cost. In May 2004 the
Director of Six Sigma for Circuit City announced that Six Sigma was being
applied to very important company projects and had been used to streamline
the hiring process from as much as 18 days down to 8 days. Six Sigma has
since been applied to open box sales, pricing markdown reduction and testing
processes such as determining the sales impact of bundling products with
accessories. [18]
Community involvement
Heart of the City In early 2006, Circuit City rolled out their "Heart of the
City" initiative which is a label for the company's ongoing encouragement
for all associates to volunteer for charitable causes. Volunteering is not
compulsory, but is encouraged through district and store management. Each
store has a monthly donation budget that it can use for donations to
charity. In addition, stores organize events such as softball games, car
washes, and bake sales to raise money for charities in their own
communities. Included within the "Heart of the City" initiative are
corporate donations and partnerships with organizations nationwide. As of
June 2006, Heart of the City has developed an "Umbrella", which they
consider the people and organizations they support through the program.
There are four programs that fall under this umbrella which include Boys and
Girls Clubs of America, United Way of America and as of December 2006, the
newly created "Associate Relief Fund" which was originally an idea to help
those associates directly affected by Hurricane Katrina. The Associate
Relief Fund will now go to help any associate in need of assistance who
otherwise wouldn't receive any.[19] [20] [21] [22]
Boys & Girls Club of America Starting in 2001, Circuit City has partnered
with the BGCA for their annual ImageMakers contest. This $5 million
initiative, funded by the Circuit City Foundation, helps BGCA develop a
state-of-the-art photography curriculum, host a photography competition,
provide photography resources and involve Club members in this important
visual arts medium.[23][24]
Habitat for Humanity Circuit City is a Build Partner with Habitat for
Humanity. As recently as March 2006 Circuit City made charitable
contributions to the Richmond, VA. Habitat. Circuit City associates
volunteered, and assisted in the construction of several houses near the
Richmond area that same month.[25][26]
American Red Cross In the wake of Hurricane Katrina, Circuit City announced
on September 9, 2005 the donation of $1 million to the American Red Cross
Disaster Relief Fund. In addition to the corporate donation, Circuit City
associates participated in a "Drive for a Million" fundraising effort, which
included a variety of projects (bake sales, car washes, etc.) at Circuit
City locations across the country. "Drive for a Million" allowed all
associates, from stores, service and distribution centers and the company's
Store Support Center, to pool their energies and contributions to benefit
the American Red Cross Disaster Relief Fund.[27]
United Way Circuit City makes charitable contributions to various
organizations through the United Way and lists this organization in its
"Community Involvement" section of its website.[28][29]
Real estate
Due to the expansion of Circuit City stores in the 1970s-1990s, the company
has accumulated a surplus of unused real estate with a presence in nearly
every major market in the country. Although a typical retail location is
approximately 30,000 square feet (2700 m²), they have numerous freestanding
and in-line locations ranging from 2,000 to 50,000 square feet (180 to 4500
m²). They also have office, service and distribution surplus locations
scattered across the country. Circuit City's Surplus Disposition Team is
dedicated to exploring creative disposition strategies. During Circuit
City's 2005 fiscal year (March 1, 2004 through February 28, 2005), the team
successfully disposed of approximately 1.2 million square feet (108,000 m²)
of vacant retail space. The Surplus Team utilizes facilitating assignments,
third party sales, direct leases between landlords and prospective users and
bringing together smaller users interested in demising big box vacancies in
an effort to profit from unused real estate.[30] In January, 2007, Circuit
City's vice president for real estate announced plans on opening up 200-300
stores in the next two years, a large increase from the current trend of
10-12 stores a year. [31]
firedog
During fiscal 2007, the domestic segment launched the firedogSM brand to
provide home theater installation and PC services in-store, at home and
remotely. The brand name captures the attributes that the company wants its
technicians and installers to embody: helpful, knowledgeable, friendly and
reliable. The decision to build an integrated brand for both PC services and
home theater installation was based on customer research and was more
cost-efficient than building multiple brands. As of the business model
change on May 31st, firedog now includes Roadshop installation.
Circuit City-owned brand names
* Anika
* Centrios
* Circuit City Rewards
* ESA
* firedog
* i-next
* Liquid Video
* NexxTech
* Roadshop
* Sector 7
* Verge
* Wasaki
Slogans
* "The Intelligent Choice" (mid- to late-1980s)
* "Where Service is State of the Art" (1989-1995)
* "The Right Prices Right Now" (1995-1996)
* "Price, Selection, and Service" (1996-2000)
* "Imagine That" (2000-2001)
* "We're with You" (2001-2004)
* "Just What I Needed" (2004-April, 2007)
* "Circuit City Makes it Simple" (2005 Christmas Season)
* "It's Holiday Time in the City" (2006 Christmas Season)
* "Ignite Your Passion" (Coming Summer 2007)
read the copyright
Current News: a dictionary of current search terms and popular interest topics.