Losses, layoffs, store closings, executive shuffling. Circuit City’s recent implosion poses the questions: what happened and what is the future of the retail giant?
Amid the doom and gloom, some analysts find evidence of a turnaround in progress. But the company is still in trouble and must differentiate itself further from the likes of Best Buy, Wal-Mart and Costco, and successfully meet customers’ needs while tightening its belt, analysts said.
Hammered by last year’s flat panel TV price wars, Circuit City had disastrous third and fourth fiscal quarters, losing $12 million for the year, compared to a $141 million gain in fiscal 2006. In comparison, Best Buy ended its 2007 fiscal year on March 3 with net earnings of $1.377 billion, up 20 percent from the year prior, on total revenues of $35.9 billion. Then, earlier this week, the company announced that it is revising its Fiscal 2007 results to move a $4.5 million loss from the fourth quarter to the third, while also announcing that they expect a before-tax loss of $80 to $90 million for the first quarter of Fiscal 2008.