Whether the retailer will disappear was anybody’s guess this week, but the situation didn’t look great, given Circuit’s balance sheet, the general lack of consumer confidence and the global credit crisis.
For Gary Yacoubian, president of MyerEmco Audio Video, the premise is flawed. “I don’t think they’re going away,” he said. “If they do go away, it’s not in the near term.”
Like others, he expects the retailer to reorganize. Even as Circuit downsizes, Yacoubian doesn’t expect the company to exit MyerEmco’s markets, given the areas’ relative affluence.
To the idea that big box retailers would have an even stronger hand with vendors if Circuit failed, Yacoubian countered, “Don’t they already? I think in the end vendors need diversity in their own portfolio of business anyway.”
But for some, Circuit City is a critical counterweight in CE retail’s competitive balance.
“The last thing we would ever want in the world is for Circuit City to go away,” said Richard Glikes, executive director of Home Theater Specialist Association (HTSA). “That would be a very, very bad thing for the industry.”
Glikes, however, doesn’t think vendors will let Circuit City die.
“If you didn’t have Circuit City, then you’d have Best Buy and Wal-mart and maybe CostCo in too powerful a position with the vendors,” he said.
“I don’t think it’s good for the clients either. People need choice.”Glikes said Circuit “has to survive” and he expects a “different iteration” of the Richmond, Va.-based chain. More audio, the return to a commissioned sales floor and better, smaller locations could be some of the components to Circuit’s survival, Glikes said.
“You don’t need 20- to 40,000 (square) feet for audio, video and computers,” he said. “Most of (Circuit’s larger) stores were designed for when Circuit had appliances, and the size of TVs have actually gotten smaller. They could do a nice job in 10- to 12,000 (square) feet, do a lot of business and make a lot of money.”
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CC will ahve to change their Buisness model inorder to make any head way. You cannot make it in the the CE world by grab and go. The only company who can do that is Walmart due to the low grade product they sell. It is a scratch out and start over point in the companies life. If they dont they continue to trend down till death.
But do they have the management team to do it? That is the real question.From the looks of it...marketing, merchandising, supply chain and inventory management and some serious vendor management - theyare all in need of a complete and total overhall.
On one hand, Glikes is right about how they can fix Circuit, but on the other hand, the failure of the no service / low price leaders will allow value added (Service oriented)retailers like mine to flourish. If those stores hadn't been selling everything at 10% off, they would have been profitable all along. We will be the last man standing when Tweeter shuts down and Circuit downsizes in our area. When Best Buy stops discounting, and the manufacturers end the ridiculous scan down B.S., I will be the happiest guy around.
Ron McGill
Surround Sounds Inc.
Being a small independent appliance outfit owner, I've watched many of my friends be forced out of the business by these guys and others like them. I won't be crying at their demise.