Circuit City

Type: Public Company
Address: 9950 Mayland Drive, Richmond, Virginia 23233-1464, U.S.A.
Telephone: (804) 527-4000
Fax: (804) 527-4164
Web: http://www.circuitcity.com
Employees: 42,258
Sales: $9.75 billion (2004)
Stock Exchanges: New York
Ticker Symbol: CC
Incorporated: 1949 as Wards Company
NAIC: 443112 Radio, Television, and Other Electronics Stores; 443120 Computer and Software Stores; 443130 Camera and Photographic Supplies Stores; 451220 Prerecorded Tape, Compact Disc, and Record Stores; 454110 Electronic Shopping and Mail-Order Houses

Circuit City Stores, Inc., is the nation's second largest retailer of consumer electronics, personal computers, and entertainment software, with more than 600 stores located throughout the United States. The company trails only Best Buy Co., Inc. in consumer electronics sales. Aside from its signature U.S. superstores, Circuit City, through its subsidiary InterTAN, Inc., operates about 1,000 retail stores and dealer outlets in Canada under the RadioShack, Rogers Plus, and Battery Plus names. Circuit City also sells its products online. The company, based in Virginia, pioneered the concept of the electronics superstore, providing a broad variety of products in a cavernous setting. In perfecting this formula, the company became the dominant marketer in many of the areas into which it expanded.

Circuit City was founded by Samuel S. Wurtzel, an importer-exporter who owned a business in New York. Wurtzel had sold his business and was vacationing in Richmond, Virginia, in 1949 when he went to get a haircut and, while chatting with the barber, learned that the first commercial television station in the South would shortly go on the air in Richmond. Learning this, Wurtzel got the idea that it would be a good business proposition to open a store to sell television sets, reasoning that sales in the area would increase because of consumer interest in the new station's local broadcasts.

Wurtzel moved his family to Richmond and opened a store named "Wards," an acronym of its founder's family's names: "W" for Wurtzel, "A" for his son Alan, "R" for his wife Ruth, "D" for his son David, and "S" for his own name, Samuel. In addition, Wurtzel took a partner, Abraham L. Hecht. From its base in retailing televisions, Wurtzel soon branched out his business, initially called Wards Company, to include other home appliances. Within ten years, the business had expanded to encompass a chain of four stores, all of which were located in Richmond. Combined sales volume was about $1 million a year.

In 1960 Wards started to expand in another direction, as it began to operate licensed television departments within larger discount mass merchandisers in different areas of the country. The company ran television and other audio equipment sales operations in G.E.M., G.E.S., and G.E.X. stores. In the following year, Wards offered stock to the public for the first time, selling 110,000 shares in the company for $5.375 through a Baltimore stockbroker.

In 1962 Wards increased its commitment to customer service by implementing a new service plan that included a free loan of a television set if a customer's television could not be repaired in the home. Two years later, the company opened its fifth television and appliance store, in Richmond's Southside Plaza Shopping Center. This, along with the company's earlier stock offering, signaled a period of quick expansion for the company.

In 1965 Wards made its first moves to grow through acquisition. The company purchased the Richmond Carousel Corporation, a discount department store in Richmond, from the T.G. Stores company. By taking over this company, Wards moved into the sale of automotive supplies, gasoline, household supplies, clothing, and children's toys, as well as appliances. In addition, in September 1965 Wards purchased Murmic, Inc., a Delaware company that operated hardware and housewares sales areas in department stores located in the Southeast.

The following year, Wards opened its sixth Virginia store, this one located in the Walnut Mall Shopping Center in Petersburg. Each of the company's stores featured 5,000 to 8,000 square feet of space in which to display and sell televisions, audio equipment, and other household appliances. With the additional revenue from this facility, company sales reached $23 million. Also in 1966, one of Samuel Wurtzel's sons, Alan, a lawyer, returned to Richmond to take a role in the family business, in preparation for eventually taking over the reins from his father.

In 1968 Wards offered additional stock to the public, selling 1,700 shares on the American Stock Exchange. With the revenue generated by this offering, in May 1969 the company purchased Custom Electronics, Inc., an outfit that sold audio and hi-fi equipment. The company owned four stores in the Washington, D.C. area, as well as a mail-order audio supplies operation called Dixie Hi-Fi; it also ran nine stereo departments in department stores located in an area stretching from Mobile, Alabama, to Albany, New York. Five months later, Wards continued its rapid expansion in the Mid-Atlantic states by buying the Certified TV and Appliance Company of Virginia Beach, Virginia, which operated three stores in the Tidewater area. The company also opened an additional Carousel store in the Richmond area.

One month later, Wards branched out from its familiar geographical area and its core business of appliance retailing when it purchased The Mart, located in Indianapolis, Indiana. This company had as one of its major components the tire retailing operations of the Rose Tire Company and its affiliates, but it also sold televisions, appliances, and furniture. In its furthest geographical leap, Wards also signed a contract to operate licensed television departments in Zody's Department Stores in Los Angeles.

The company's rapid expansion continued in 1970. Wards bought Woodville Appliances, Inc., which ran five television and appliance stores in Toledo, Ohio. Also in the Midwest, it acquired the operations of the Frank Dry Goods Company, which ran a television, appliance, and furniture store in Fort Wayne, Indiana.

By this time, Wards' rapid growth had brought it to a new era, and this was symbolized in 1970 by the transfer of power from the founders of the company to a younger generation. Samuel Wurtzel, its founder, stepped down as president, although he remained chairman of the board, and Abraham Hecht, his partner, retired. In their stead, Alan Wurtzel was named president of the company.

Among the first moves made by the new president was the opening of two specialty stores in Richmond, called Sight 'N Sound, that sold only audio equipment. These outlets were designed to take advantage of the boom in demand for high-tech stereo equipment.

In 1972 Alan Wurtzel, still president, assumed the responsibilities of chief executive officer of Wards. In an effort to eliminate weaker areas of the company, he closed the Franks of Fort Wayne store that Wards had purchased two years earlier and shut down three stores formerly run by Certified in Virginia. Following this consolidation, the company began to expand in the next year. Five audio stores were opened: three in the east, in Washington, D.C.; Richmond, Virginia; and Charlottesville, Virginia; and two in California. In the following year, Wards began to suffer the adverse effects of its rapid expansion and diversification into areas not related to its core business of television and appliance retailing. In 1974 the company lost $3 million on overall sales of $69 million. In an effort to stem the red ink, Wurtzel withdrew Wards from areas in which it was not turning a profit, such as tire sales. In addition, Wards was losing a large amount of money on its licensed appliance departments in three discount department store chains that were doing very badly. To cut its losses, the company began to move out of its leased audio and television operations in department stores, retaining only its involvement in the California Zody's stores.

In a shift in direction also occurring in 1974, Wards closed two of its original stores in Richmond, opting instead to risk half the company's net worth opening a $2 million electronics superstore. With this move, Wards began to shift its focus from appliances in general to the growing market in consumer electronics. The company called its pioneering venture "The Wards Loading Dock." With 40,000 square feet, the warehouse store displayed and sold a very large selection of video and audio equipment and major appliances. This enormous facility, with its exceptionally broad offerings of more than 2,000 products, enabled Wards to take a strong lead against its competitors. In addition, the superstore's high volume of sales meant that the company could afford to offer lower prices than its smaller competitors, as well as such amenities as home delivery and in-store repairs. In this way, by locating its stores in medium-sized markets otherwise served only by smaller, mom-and-pop operations, Wards was able to exploit growing consumer interest in new electronics products. The successful superstore concept became the innovation upon which Wards built its future growth.

Also in 1974, Wards expanded its Dixie Hi-Fi line of discount audio stores, adding nine new properties. In the next year, as its Richmond superstore showed promising returns, Wards began to streamline its operations. The company sold its four Woodville television and appliance stores in Toledo, Ohio, and also shuttered four of its five Mart stores in Indianapolis. In addition, the company shed its two Carousel stores in Richmond.

Two years later, in 1977, anticipating that the boom in stereo sales would eventually slow, Wards began to broaden the offerings of its Dixie Hi-Fi and Custom Hi-Fi discount audio equipment stores, transforming them into full-service electronics specialty markets. With this new concept, Wards changed the name of the stores to "Circuit City," opening six of the new facilities in the Washington, D.C. area. With 6,000 to 7,000 square feet of space, the new stores featured video and audio equipment made by well-known brand names, as well as in-store service capabilities and a pick-up area for people to load purchases into their cars.

To shift its operations toward the Circuit City concept, Wards continued to streamline in 1978. The company left the mail-order electronics business, which it ran under the name "Dixie," and also closed its four Richmond Sight 'N Sound stores. In the following year, the company continued its progress toward large retail outlets, opening a second Wards Loading Dock in Richmond. The company ended 1979 with $120 million in sales.

In 1981 Wards made its first incursion into a significant and challenging new market when it merged with the Lafayette Radio Electronics Corporation, which ran eight consumer electronics stores in the New York City metropolitan area. The company paid $6.6 million for the bankrupt retailer, earning $36.5 million in tax credits as a result of the acquisition, a benefit that observers predicted would drive up its own earnings. Lafayette's reputation within the highly competitive New York market was that of a small specialty seller that provided obscure, high-priced brand-name goods to hi-fi hobbyists. Wards faced an uphill battle in its struggle to broaden the chain's appeal and return it to profitability, especially since other New York electronics retailers routinely discounted items 50 percent or permitted haggling over the price of their products.

At the same time that Wards moved into the New York market, the company began to expand its Loading Dock superstore concept in the geographical areas where it already had a presence. Capitalizing on its other name, the company christened its new outlets Circuit City Superstores. The first four stores under this name opened in Raleigh, Greensboro, Durham, and Winston-Salem, North Carolina. In the following year, Wards simplified the naming of its outlets by changing the names of its Richmond Wards Loading Dock stores to Circuit City Superstores.

By 1982 Wards was operating four retail chains, including Circuit City stores, larger Circuit City Superstores, its Lafayette properties in New York, and its operations in Zody discount stores in California. Altogether, the company ran 100 outlets, twice the number it had owned just seven years earlier. A total of 80 percent of Wards' revenue was derived from sales of consumer electronics, and the company reaped solid profits from its marketing of Sony Betamax videocassette recorders (VCRs) and Pioneer stereo equipment. In Washington, D.C., Wards' Circuit City stores held the largest market share, garnering 11 percent of the sales of consumer electronics. By the end of 1983, Wards' pattern of consistent growth through emphasis on large retail outlets had led to sales of $246 million for the fiscal year.

As a sign of its shifting identity, Wards changed its corporate name to Circuit City Stores, Inc., in 1984. Also in this year, its stock was listed on the New York Stock Exchange for the first time. Although the leadership of the company changed hands--Alan Wurtzel stepped up to the post of chairman of the board, to be succeeded by Richard Sharp--its basic direction did not. Sharp's background was in computers, not retailing, and he had first come into contact with Circuit City when he installed a computer system to control sales and inventory in some of its stores. Under Sharp, the company continued to consolidate its operations in very large stores, replacing regular Circuit City stores with Circuit City Superstores. This process began in Knoxville, Tennessee; Charleston, South Carolina; and Hampton, Virginia.

These stores, some of which contained nearly an acre of floor space, used their grand scope to bring a theatrical flair to retailing consumer electronics. The stores featured solid walls of television sets, all tuned to the same channel. Customers entered by walking past the service department, a visible symbol that the company serviced what it sold. The stores were laid out like baseball diamonds, and customers were led around the displays by a red tile walkway. Particularly popular items were located at the back of the store, to encourage impulse purchasing on the way. By 1984 Circuit City was operating 113 stores, which made it the leading specialty retailer of brand-name consumer electronics. The company's growth continued briskly, fed by innovative new electronics products such as cordless telephones, microwave ovens, and VCRs, for which initial demand was high. Its superstores contributed the largest part of its earnings, while the company's New York operations continued to lose money. To fuel continued growth, Circuit City further expanded its operations. In 1984 the company planned a large expansion around Atlanta and opened 15 new stores in Florida. In locating stores, Circuit City adhered to a policy of clustering them together in the same geographic area, which allowed for economies of scale in advertising and promotion.

In 1986 Circuit City took the final step in consolidating its operations. The company closed down its 15 unprofitable stores in the New York area, run under the Lafayette name, after a five-year, $20 million struggle to crack this tough market. In addition, Circuit City withdrew from its arrangement with the 50-store Zody's discount department store chain in California. This low-rent retailer, which had long been suffering financial troubles, provided an inhospitable home to Circuit City's operations and contributed no earnings to its bottom line. Instead, the company decided to put the resources previously used to run these operations into further Circuit City Superstores, concentrating expansion in the Southeast and in California, where it planned to open its own freestanding stores. In moving into a new area, Circuit City methodically set out to win the lion's share of sales in that market. The company typically opened a large number of very large stores all at once, advertised heavily, and distributed products efficiently.

These efforts bore fruit in February 1987, when Circuit City's annual sales hit the $1 billion mark for the first time, driven in large part by the demand for VCRs, which also pushed up demand for new televisions and other audio equipment. The company faced a challenging future, however, as demand for this core product cooled and competition from other electronics superstores heated up. Despite these adverse circumstances, by 1988 the company owned 105 stores, 32 of which were located in California.

Armed with the nation's largest market share, Circuit City planned to add 20 new outlets. Among these new outlets were several that featured a new format. Called Impulse, these stores were tested by the company in Baltimore, Maryland; Richmond, Virginia; and McLean, Virginia. These stores, designed for malls, sold small electronic products for personal use or to be given as gifts. Three years later, the company announced that its test of this concept had been successful, and that it planned to open 50 more such outlets.

By 1989 Circuit City's profits had tripled in just three years to reach $69.5 million, despite a general recession in the consumer electronics retailing industry. Observers attributed the company's success to strong management and a merchandising formula that had been honed and refined for many years. That formula was adjusted further in 1989 when Circuit City began opening mini-Superstores in markets too small for a full-fledged massive outlet. Claiming that the mini-store offered the same service and selection as a larger outlet, the company opened a test site in Asheville, North Carolina. By the following year, sales overall had hit $2 billion, and earnings were up as well. In the meantime, the company's superstores expanded their product array, offering personal computers for the first time in 1989 and recorded music in 1992.

Circuit City surged ahead in the early 1990s, with strong sales growth and steady expansion into new markets. By 1994 it had close to 300 stores and had plans to open almost 200 more. But growing competition, particularly with the similar electronics superstore chain Best Buy, caused the company to fight harder for market share and to search for new ways to make money. In late 1993, Circuit City announced it would cut prices in markets it shared with Best Buy, sparking a grueling price war. The firm differed from Best Buy in offering a high-service, hard-sell sales environment, with salespeople working for commission. Best Buy was more of a help-yourself retailer. Circuit City publicly defended its more aggressive style, broadcasting the results of a survey in 1994 that claimed that consumers preferred its level of service. By 1995, half its stores were in markets shared by Best Buy, and 70 percent of its markets were classified by analysts as highly competitive. Despite the competition, Circuit City had sales of about $7 billion by 1995, and sales and earnings were rising by 20 percent annually.

The company went in a new direction in 1993, opening the first of what became a chain of used-car lots. Two years later, Circuit City was trumpeting its new chain, CarMax. Circuit City's CEO Sharp moved the company into used cars because he saw that the existing market was lucrative, fragmented, and not well run. Customers hated the haggling and distrusted salespeople, as a rule, in the traditional used-car lot. CarMax offered a huge, clean lot of cars marked with bar codes so that customers could easily locate the vehicles in which they were interested from a central computer listing. Prices were fixed, so the dreadful bargaining was out. CarMax lots held 500 to 1,000 cars, all no more than five years old, and with less than 70,000 miles on them. Each car went through a 110-point inspection, and CarMax offered a 30-day warranty. The aim was to bring Circuit City's retailing experience into this new industry and make the buying process easier on the customer. Though Circuit City was cautious about releasing sales figures for its first CarMax stores, one analyst estimated that its Richmond, Virginia, lot was bringing in about $55 million after being open one year. By 1996 there were five CarMax outlets, and one year later Circuit City sold a 25 percent stake in CarMax through an IPO that raised nearly $415 million and created a CarMax tracking stock. Circuit City retained 75 percent of the used-car retailer.

Used cars seemed like an odd leap for an electronics retailer, yet it was clear Circuit City needed something to keep it going, as the electronics market became saturated. Best Buy passed up Circuit City during fiscal 1996 and won the title of number one electronics retailer, and competition between the rivals did not let up. In 1998 Circuit City trotted out a new product, a digital movie disk called Divx, hoping to get in on a ground floor technology. Divx was pitched to Circuit City by a Los Angeles legal firm, and Circuit City threw money at it. Divx originally stood for digital video express, but it soon became known just by the acronym. It was a disk digitally encoded with a movie, and consumers could purchase it for between $4 and $5, watch the movie within 48 hours, and then throw it away. Divx players were hooked by phone line to a central computer, which registered when the movie was watched, and billed the customer an additional three dollars if the disk was used after the initial two-day period. It competed directly with another digital movie format called DVD, which were disks offered for rent, like traditional videocassette movies. Both these technologies were struggling for consumers' attention, with each format offering only a few hundred titles as they rolled out in the fall of 1998. The large video rental chains refused to sell Divx disks, fearing they would undermine their business, and only Circuit City and another chain called Good Guys initially sold Divx.

By fiscal 1999 Circuit City was enjoying strong sales in its core electronics business--helping push revenues past the $10 billion mark--but its used car and Divx ventures were not doing well. CarMax lost $23.5 million in 1998, on sales of $1.5 billion. The chain had grown to more than 30 locations, but Circuit City CEO Sharp halted further expansion in 1999, as sales declined. Competition with a copycat chain, AutoNation, had left CarMax struggling. Some new stores were way too big, and advertising costs were heavy. By 1999 Divx, too, seemed to have lost out to the competition. An estimated 10,000 retailers were selling DVD disks, the reusable digital movies that could either be rented like movies on video or purchased for about $20. Only about 740 of these 10,000 retailers also dealt with Divx, and most of these retailers were actually Circuit City stores. Both Sony's film studios and Warner Brothers declared they would not make their movies available on Divx, and the technology seemed to be getting squeezed out. In June 1999 Circuit City surrendered, pulling the plug on the venture after having invested $233 million to develop and promote the new product. It also took a $114 million after-tax charge for the first quarter of fiscal 2000. In July 1999, meantime, Circuit City launched its e-commerce web site, which allowed customers to order products online for both delivery and store pickup; customers could also return online-purchased items at the nearest store.

In June 2000 W. Alan McCollough was promoted from president and COO of Circuit City to president and CEO. Sharp remained chairman for two more years, whereupon McCollough took on that post as well. The first years of the McCollough era brought a host of changes to the company. Just one month after he was named CEO, Circuit City announced it would stop selling appliances in favor of a pure focus on consumer electronics. The company's stores had generated 14 percent of their overall sales from appliances, but the appliance sector became less appealing after Home Depot, Inc. and Lowe's Companies, Inc. aggressively entered the category and proceeded to engage in pricing battles. In connection with this category exit, Circuit City closed six distribution centers and eliminated 1,000 jobs. At the same time, the company began a three-year, $1.2 billion overhaul of its more than 570 stores. In addition to eliminating the appliances and boosting the selection of hot-sellers such as DVD movies, video games, and digital cameras, the remodeled stores were more self-service and consumer-friendly--taking a page from the Best Buy formula for success. The new format cut back on the amount of space taken up by the store's warehouse section, where most of the products had previously been stored, inaccessible to customers without the intervention of a salesperson. Circuit City outlets now had more floor space, with more products available for customers to pick up themselves and take to a checkout for purchase. The stores had a more open format, with wider aisles, as well as shopping carts and baskets for customers to use. Although salespeople remained on commission--a practice abandoned by Best Buy in 1989--they took a less aggressive approach than before.

As this revamp was rolled out chainwide, Circuit City was hurt by a weak retail environment and strong competition, particularly by the ever expanding Best Buy. While Circuit City's core business struggled, CarMax had turned solidly profitable. The company took this opportunity to once again focus solely on consumer electronics, spinning off the used-car retailer in October 2002 as a separately traded, independent entity called CarMax, Inc.

McCollough continued his efforts at revitalizing the chain in 2003. The key initiative that year was the elimination of commissions at its stores as Circuit City adopted a single hourly pay structure chainwide. It dismissed 3,900 commissioned salespeople and replaced them with 2,100 hourly employees. In addition to reducing annual operating costs by as much as $130 million, eliminating commissions furthered the move toward a more self-service approach in the stores. Circuit City's continued weak position was highlighted that year when the owner of CompUSA, Inc., operator of computer superstores, made a bid to acquire the company for about $1.5 billion. The Circuit City board of directors rejected the proposal in June 2003.

Continuing to shed noncore operations, Circuit City sold its bank-card finance operation to FleetBoston Financial Corporation in November 2003 for $1.3 billion. Connected with this sale was an after-tax loss of $90 million. The company also closed 19 underperforming superstore locations in early 2004, taking an additional after-tax charge of $35 million. For the fiscal year ending in February 2004, overall sales fell 2 percent, to $9.75 billion. With the company's more than 600 stores barely profitable, and the $125 million in charges, Circuit City posted a net loss for the year of $89.3 million.

In 2004 Circuit City worked to open 65 to 70 new stores--its most aggressive plan of expansion in a decade. About half of these would be relocations: The company was trying to eliminate outlets that were sited in less than ideal locations and some of the older stores with huge warehouse space that made remodeling too expensive. During the spring of 2004 Circuit City completed two acquisitions: MusicNow, Inc., an online digital music store; and InterTAN, Inc. Circuit City spent about $300 million for InterTAN, a firm based in Barrie, Ontario, that operated more than 980 retail stores and dealer outlets in Canada under the RadioShack, Rogers Plus, and Battery Plus names. In addition to gaining a retailing foothold in Canada, and setting the stage for the possible expansion of the Circuit City chain north of the border, this deal was also designed to help Circuit City expand its offerings of private-label products at its U.S. stores. Plans were made to begin rolling out InterTAN private-label products into Circuit City Superstores in the fall of 2004. Fort Worth, Texas-based RadioShack Corporation had spun off InterTAN in 1987. Not done with its wheeling and dealing, Circuit City sold its private-label credit card operation to Bank One Corporation in May 2004 for approximately $400 million. Despite all these moves, the prime challenge confronting Circuit City remained the same: returning its core U.S. superstore operation to robust profitability while operating within one of the most ruthlessly competitive sectors of the retail market.

Principal Subsidiaries

CC Distribution Company of Virginia, Inc.; Circuit City Properties, Inc.; Circuit City Stores West Coast, Inc.; InterTAN, Inc. (Canada); MusicNow, Inc.; Northern National Insurance Ltd. (Bermuda); Patapsco Designs, Inc.; Tyler International Funding, Inc.

Principal Competitors

Best Buy Co., Inc.; CompUSA Inc.; Wal-Mart Stores, Inc.; CDW Corporation; RadioShack Corporation; Staples, Inc.; Office Depot, Inc.; Amazon.com, Inc.; Boise Office Solutions; Sears, Roebuck and Co.

Further Reading

Andrews, Edmund L., "Struggling for Profits in Electronics," New York Times, September 10, 1989.

Bautz, Mark, "How a Straight-Arrow Company Makes Out Like a Bandit," Money, October 1995, p. 68.

Brinkley, Joel, "DVD Leads Race for TV Disks, But It Is Looking Over Its Shoulder," New York Times, July 6, 1998, pp. D1, D4.

Brown, Paul R., "Some People Don't Like to Haggle," Forbes, August 27, 1984.

Carpenter, Kimberly, "Circuit City Lays an Egg and Hatches a Strategy," Business Week, April 21, 1986.

"Circuit City Expansion," Television Digest, April 17, 1995, p. 17.

"Circuit City Fires Back at Critics," Discount Store News, September 19, 1994, p. 5.

Cochran, Thomas N., "Circuit City Stores, Inc.," Barron's, January 2, 1989.

Foust, Dean, "Circuit City's Wires Are Sizzling," Business Week, April 27, 1992.

Gilligan, Gregory J., "Circuit City Buys Two Firms," Richmond Times-Dispatch, April 1, 2004, p. C1.

------, "Circuit City's Past Still Haunts It," Richmond Times-Dispatch, January 18, 2004, p. D1.

------, "Will Gawkers = Buyers? Circuit City Hopes to Boost Profits with a Line of Private Label Gadgets," Richmond Times-Dispatch, June 20, 2004, p. D1.

Heller, Laura, "At Circuit City, Consistency Is Key," Discount Store News, January 3, 2000, p. 24.

Johnson, Jay L., "Circuit City Recharged," Retail Merchandiser, January 2001, pp. 43+.

King, Sharon R., "Circuit City Is Learning the High Price of New Video Technology," New York Times, April 6, 1999, p. C9.

Lavin, Douglas, "Cars Are Sold Like Stereos by Circuit City," Wall Street Journal, June 8, 1994, pp. B1, B6.

Merwin, John, "Execution," Forbes, April 18, 1988.

Ramstad, Evan, "Circuit City Pulls the Plug on Its Divx Videodisk Venture," Wall Street Journal, June 17, 1999, p. B10.

------, "Circuit City's CEO Gambles to Galvanize the Chain," Wall Street Journal, September 18, 2000, p. B4.

------, "Circuit City Will Stop Selling Appliances," Wall Street Journal, July 26, 2000, p. B8.

Rudnitsky, Howard, "Would You Buy a Used Car from This Man?," Forbes, October 23, 1995, pp. 52-54.

Spiegel, Peter, "Car Crash," Forbes, May 17, 1999, pp. 130-32.

— Elizabeth Rourke

It has been suggested that Firedog be merged into this article or section. (Discuss)

This article is about Circuit City Stores, Inc., the bankrupt company. For the Circuit City eCommerce store owned by Systemax, see CircuitCity.com.

Circuit City Stores, Inc.

Former type	Public (Pink Sheets: CCTYQ)
Fate	Liquidating itself under Chapter 11 bankruptcy
Founded	1949
Defunct	March 8, 2009
Headquarters	Richmond, Virginia
Industry	Retail
Products	Consumer electronics
Owner(s)	Systemax Inc.

Circuit City Stores, Inc. (Pink Sheets: CCTYQ) was an American retailer in brand-name consumer electronics, personal computers, entertainment software, and (until 2000) large appliances. The company opened its first store in 1949 and liquidated its final American retail stores in 2009 following a bankruptcy filing and subsequent failure to find a buyer. As part of its bankruptcy, the company sold its Canadian subsidiary, InterTAN (which operates as "The Source"), to Bell Canada.

The "Circuit City" brand is now owned by Systemax, which uses the brand to sell electronics as an online retailer. On May 11, 2009, Systemax bought the brand, trademark and e-commerce business at an auction from Circuit City Stores, Inc. Systemax had earlier acquired CompUSA and TigerDirect which now operate as online retailers. Systemax in April 2009 signed a stalking horse agreement for $6.5 million which is an initial offer for a bankrupt company's assets.^[1]

At the time of liquidation, Circuit City was the second largest U.S. electronics retailer, after Best Buy. There were 567 Circuit City Superstores nationwide, ranging in size from 15,000 to 45,000 square feet (1400 to 4000 m²), when the company announced total liquidation. An additional 155 stores were closed when the company filed for Chapter 11 bankruptcy in November 2008 with the intent of continuing operations. However, attributing its ultimate demise to the lack of consumer spending and overall economic downturn during the late 2000s recession, Circuit City began liquidation of its remaining stores on January 16, 2009, and they were all closed on or before March 8, 2009.^[2][3][4] A small staff remains on hand at corporate headquarters to complete the company's business, including the termination of its many leases, and the sale of its company-owned real estate and Canadian subsidiary.

Contents 1 Beginnings 1.1 Wards 1.2 Change to Circuit City 2 Superstores 2.1 Company diversification 3 Horizon format 3.1 Six Sigma 4 Problems starting 5 Canada expansion 6 First buyout offer 6.1 Criticism and controversy 6.2 Virtual-reality store 6.3 Associates 6.4 Initiatives 6.4.1 Multi-Channel 6.4.2 Supply Chain 7 The City format 8 Problems escalating 9 Final business model 10 Bankruptcy and liquidation 11 Hindsight 12 Former brand names 13 Real estate holdings 13.1 Besy Buy 13.2 Conn's 13.3 hhgregg 13.4 P.C. Richard & Son 14 Gallery 15 References 16 External links

Beginnings

Wards

Samuel S. Wurtzel studied accounting and got the idea to open a television store while on vacation. Abraham L. Hecht joined Wurtzel as a partner. Both founders, Hecht and Wurtzel, died in 1985.^[5]

In 1932, Samuel S. Wurtzel opened the first Wards Company retail store in Richmond, Virginia, at 705 West Broad Street.^[6] (Wards Company and Circuit City are completely unrelated to the other former retailer that went out of business in the 2000s, Montgomery Ward.) The name "Wards" was actually an acronym of the founder's last initial and the initials of members of his family (W = Wurtzel; A = Alan; R = Ruth; D = David; S = Sam).^[7] Wards was the first retailer to sell color televisions in Richmond, Virginia.

By 1959, Wards Company operated four television and home appliance stores in Richmond. The company continued to grow and acquired stores in other locations including Albany, New York; Mobile, Alabama; Washington, DC; and Costa Mesa, California. During the 1970s and early 1980s it also sold mail-order under the name Dixie Hifi, advertising in the hifi magazines of the day. In Richmond, Wards experimented with several retail formats including smaller mall outlets branded "Sight-n-Sound" and "Circuit City". Sight-n-Sound and Circuit City stores were replaced by the Circuit City Superstore format.

Change to Circuit City

Circuit City logo from 1984-1989.

Circuit City logo from 1989-2001.

Wards Company officially changed its name to Circuit City and became listed on the New York Stock Exchange in 1984.^[8] One of the company's early slogans was "Circuit City — Where the Streets are Paved with Bargains." The company, which had leased floor space from the Zody's department stores as well as other department stores, began acquiring retail stores and turning them into Circuit City Superstores. The first of these replacements occurred in Knoxville, Tennessee; Charleston, South Carolina; and Hampton, Virginia. Wurtzel served as president of the company until 1970. He remained the chairman until 1984.^[6] When he stepped down, his son Alan served as chairman until 1994.^[9]

Superstores

Original Circuit City Superstore format in San Antonio, TX. The left side of the building used to have a "Verizon Wireless" sign and prior to that an "Appliances" sign.

"Half Plug" Circuit City Superstore format in Huntsville, Alabama that included a more open showroom, used from 1995-2000.

Wards purchased a new headquarters building in Richmond, Virginia and in the extra space opened "Wards Loading Dock," its first big-box format. The large-format store was very popular with customers. The company continued to expand with new format ^[8] modeled after "The Loading Dock" format and renamed it Circuit City Superstore. Circuit City began to replace its smaller stores with the Superstore format and started the nationwide expansion.

In 1988, the company began constructing the new "plug" design Superstore stores. During this era, Circuit City became known for its exceptional service, going so far as to have many of its staff factory-trained. Its slogan, likewise, was "Welcome to Circuit City, Where Service Is State of the Art."^[10]

In 1991, Circuit City entered the New York City market by acquiring the remnants of the failed Lafayette Radio chain. They operated stores there under the "Lafayette-Circuit City" name for a few years and then exited the market, returning several years later under the Circuit City banner.

In 1999, Circuit City introduced the "Pluggie" mascot that was seen on price tags and in-store advertising. The mascot was a plug similar to the one seen on Circuit City television commercials plugging into store fronts, but had a smiley face on the front of it. "Pluggie" was discontinued before the introduction of the new circle logo in 2001.

Company diversification

CarMax auto surperstore in Raleigh, North Carolina.

Carmax is a used car auto superstore started by Circuit City at the time to diversify from the company from the consumer electronics environment. The first location opened in Richmond, VA in September 1993. Initially the stores only offered a large selection of newer model used cars with a non-negotiable "lower price." Later, CarMax expanded into new car sales with the same non-negotiable "low price." Carmax was spun-off in 2002, so Circuit City could re-focus on its core electronics business. The independent company is currently the United States' largest used-car retailer and a Fortune 500 company.

Circuit City Express was a chain of mall-based Circuit City stores with over 55 locations at its peak. The first locations opened in Baltimore, Maryland; Richmond, Virginia; and McLean, Virginia in 1989.^[11] The stores were originally called "Impulse," but were later renamed in 1995 to focus on the strength of the Circuit City brand. These stores focused on small electronic products for personal use or to be given as gifts. Cellular phones became a major focus of the business since all major carriers were sold. Circuit City Express stores offered Superstore prices and the Circuit City "Price Match Guarantee" in a mall environment.

DIVX was developed by Circuit City and launched in 1997 as a complement to DVD. DIVX discs cost $5 each, but could only be played for 48 hours on proprietary set-top players before a continuation fee was required to continue viewing. The player was connected to a phone line to check whether the disc was still valid.^[12] Opposition to the format and limited acceptance by the public led Circuit City to discontinue the format in 1999. Circuit City took a US$114 million loss to close its DIVX division.

Circuit City's firedog logo used from 2006-2009.

firedog was launched in August 2006 to provide in-store, in-home, and online computer and home theatre technical support and installation services^[13] in competition with other retailers' consumer and business technical services offerings such as Best Buy's Geek Squad and Staples EasyTech.^[14] The firedog brand was sold to Firstmark for US$250,000 in September 2009.^[15]

First North American National Bank was created by Circuit City to operate its private-label credit card in 1990.^[16] In 2002, Circuit City began offering a co-branded Visa credit card. It sold both of these operations in 2004 to Bank One (now Chase Bank).

Patapsco Designs was acquired by Circuit City in 1987.^[17] The company was in charge of designing product displays and other electronic services for Circuit City. Patapsco Designs was founded in 1977 and is based in Frederick, Maryland and in November 2004 was aquired by American Computer Development Inc. Patapsco Designs, Inc. filed a voluntary petition for reorganization under Chapter 11 Bankruptcy in joint administration with Circuit City Stores, Inc. in November 2008.^[18]

Horizon format

Initial Circuit City Horizon format in Rome, Georgia, used in 2000 and updated with the new circle logo in 2001.

Horizon Circuit City format in Hazelwood, Missouri, used from 2001-2007.

By 2000, many Circuit City stores were out of date and in bad locations, unable to compete with the competition from newer Best Buy stores. So, in 2000, Circuit City exited the large appliance business and debuted a more self-serve "Big Box" format called "Horizon". The move was controversial because in the previous year Circuit City was the number two appliance retailer in the United States, only behind Sears. The company had earned nearly US$1.6 billion in sales revenue from large appliances in 1999. Executives at the time were worried about the competition from Home Depot and Lowe's and believed that there would be a big savings in warehouse storage and delivery costs by exiting the large appliance business. Years later, it was realized that Circuit City missed out on the residential housing boom in the mid 2000's, that saw a dramatic rise in new appliance sales.

The new "Horizon" stores abandoned the original showroom experience for a brighter, more open sales floor format with open ceilings, low fixtures, and wood floor aisles to allow customers to browse the merchandise easily. The format allowed putting all products on the sales floor, except those that are too large for customers to carry themselves. Shopping carts were added for the expanded assortment of grab-and-go merchandise. A row of registers were located at the front of the store for the first time for quick checkout. Previously, the stores only had registers located within each department since the salespeople were on commission. Even though the new format had commissioned sales people, it was becoming very similar to Best Buy.

Every Superstore was retrofitted after the exit from the large appliance business, using the space for an expanded self-serve computer accessory and software selection. Stores at the time only sold PlayStation games under an exclusive agreement. The new space allowed them to sell Nintendo, Sega, and eventually Xbox games. Music and movie sales had been added to most stores years before, but the extra space allowed the selection to be added to smaller stores. The retrofitting project alone cost the company US$1.5 billion.^[19]

Six Sigma

Six Sigma was introduced in 2001 as an initiative within Circuit City's annual report.^[20] Six Sigma is applied to Circuit City's operational side such as supply chain and distribution centers. In May 2004 the Director of Six Sigma for Circuit City announced that Six Sigma was being applied to important company projects. As of 2006, Six Sigma initiatives ceased to exist.^[21]

Problems starting

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 3,900 salespeople were laid off, saving the company about $130 million per year.^[22] The day of the announcement all stores did not open until noon, to give the current associates the news and to prepare stores for the adjustment.

In 2004, with the expansion of the wireless phone market, Circuit City partnered with Verizon Wireless to include full-service Verizon Wireless sales and service centers in each Superstore. These locations were owned and staffed by Verizon Wireless.^[23] Circuit City stopped selling wireless phones with all other carriers due the agreement. Circuit City's bankruptcy caused 45% of the Verizon sales workforce to be laid off with the remainder resigning voluntarily or transferring to other Verizon locations.^[24]

Canada expansion

In April 2004, Circuit City announced its purchase of Canadian retailer InterTAN. Circuit City paid approximately US$284 million for InterTAN's 980 stores, which operate in Canada under the trade names RadioShack, Rogers Plus and Battery Plus. Chairman and CEO Alan McCollough believes the move provides an entry into Canada, a country where Best Buy has been expanding..^[25]

First buyout offer

On February 11, 2005, a hedge fund headquartered in Boston, Highfields Capital, offered to take over Circuit City for $17 a share, arguing that existing management had failed to maximize shareholder value. Circuit City's board rejected the offer on March 7, but doubled its own share buyback program.^[26] As of February 28, 2005, Circuit City held cash, cash equivalents, and short-term investments of US$1 billion.^[27] Also in February 2005, a private jet owned by Circuit City crashed in Colorado, killing eight passengers, four of whom worked for the company.^[28]

Philip J. Schoonover succeeded W. Alan McCollough as Chairman of the Board of Circuit City Stores, Inc. on June 27, 2006. Schoonover had previously been an executive at rival Best Buy, where his last title was Executive Vice President of Customer Segments.^[29]

Criticism and controversy

In 2005, Circuit City agreed to pay $173,220 in settlement and investigation reimbursement costs due to a false advertising claim in a 2004 New Jersey court case. The court found that important information pertaining to sale items was purposely obscured within the advertisement, thus potentially deceiving customers.^[30]

The same year, Harris and Kaufman, Attorneys at Law, successfully represented a class action suit of Circuit City employees caught in an unfair arbitration agreement. The court's ruling in Gonlugar v. Circuit City Stores, Inc., found the store's arbitration agreement to be "tainted with illegality." The arbitration agreement was found to be so one-sided that it was unconscionable. Harris and Kaufman maintained the arbitration agreement bound only the employee to arbitration, required the employee to pay fees to Circuit City for initiating the arbitration (Circuit City paid no such fee), imposed a shortened statute of limitations on the employee (not on Circuit City), and prohibited class actions.^[31][32]

During the week of August 31, 2007, the California Supreme Court ruled that the Circuit City arbitration agreement, which all 46,000 employees were required to sign, violated the state's labor laws and that Circuit City employees may sue the store for labor law violations despite having signed it. The document requires employees to waive their right to sue their employer and establishes a cap for damages regarding any wrongdoing on the part of corporate or management, which violates California's well-established law on arbitration agreements.^[33]

Circuit City's City Advantage Plan was also challenged in a United States District Court in Massachusetts. The plaintiffs' claim concerned Circuit City's cancellation of its warranty plan without full disclosure of the plan at the time of sale. The plaintiffs cited breach of contract, unjust enrichment, and violation of the Massachusetts Consumer Protection Act. Circuit City requested the matter be dismissed. The court, however, upheld the plaintiffs' claim that the monies paid for the protection plan be reimbursed and credit be issued for non-working goods returned.^[34]

Liquidators handling the sale of remaining Circuit City inventory have also become the target of consumer complaints, not only for often-uncompetitive pricing of items but also for an "all sales final" policy which allows the sale of defective or damaged merchandise at former Circuit City locations with no recourse afforded to the consumer.^[35]

Virtual-reality store

In partnership with IBM, Circuit City also developed 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 products 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.^[36]

Associates

At the time of its fiscal year 2007 Annual report, Circuit City had over 43,000 hourly and salaried associates working in the United States, and 3,071 associates in Canada.^[37]

Associates in both the domestic and international segment received frequent training through interactive E-learning courses hosted on the company intranet known as ccity.com. In the beginning, the E-learning courses were developed in conjunction with Circuit City's training department and DigitalThink. As of 2007, all coursework was developed internally and deployed and hosted on an LMS system by Convergys. In addition to online courses, associate training tools included training workbooks and management-driven in-store mentoring.

On May 9, 2007, the executive board of the Retail, Wholesale and Department Store Union (RWDSU, UFCW) issued a statement that they would support a lawsuit against Circuit City by three Oxnard, California Circuit City employees who were part of the group of employees fired for earning higher wages. The three employees are Daniel Weidler, 57, Michael Yezback, 59, and Eloise Garcia, 66. RWDSU President Stuart Appelbaum said that even though the three employees were not part of their union, "what happened to them and other Circuit City workers represents a two-fisted assault against all retail employees." According to Appelbaum's statement, the union plans to file an amicus brief in support of the California workers. RWDSU represents about 100,000 workers throughout the U.S. and Canada and felt that if Circuit City is allowed to get away with firing higher-paid employees, other major retailers will follow suit.^[38]

Initiatives

Circuit City's in-store transformation program, dubbed ISCE, started in 2007 with the termination of 3400 employees who were earning wages higher than the pay cap for their positions. It was internally announced at a store level within a few months of the terminations. The company also sought to develop a "full floor" selling staff in certain stores. Despite an effort to train associates to sell in any department, many skeptics believe that the changes may have been an early fatal error, as they led to reduced earnings and a loss of market share to competitors.^[39]

Multi-Channel

In the company's 2007 annual report, Circuit City listed Multi-Channel integration as one of its primary innovation initiatives. The company 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. The test has now resulted in a roll-out in all of the company's new concept stores known as The City.

Supply Chain

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 lag 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 were shipped directly from manufacturers to the 9 Circuit City distribution centers.^[40]

The City format

In 2007, a new 20,000-square-foot (1,900 m²) store format was introduced as "The City" and designed to eliminate previously under-utilized space. All new store openings in 2008 used this new store format.^[41]

Problems escalating

In early 2007, the starting wage for new employees was dropped from $8.75 an hour down to $7.40 an hour ($6.55 being the federal minimum wage at the time) and approximately 3,400 employees were discharged from their positions with salaries higher than the cap for their position within the company being cited as the reason. These employees were replaced with new employees brought in at the new starting wage.

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.^[42] News media reports also mention that 62 stores in Canada were to close.^[43][44]

Circuit City announced on February 23, 2007 that its 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."^[45]

In a press release on March 28, 2007, Circuit City announced that in a "wage management" decision in order to cut costs, it had laid off approximately 3400 better-paid associates and would re-staff the positions at market-based salaries. Laid-off associates were provided severance and offered a chance to be re-hired after ten weeks at prevailing wages. The Washington Post reported interviews with management concerning the firings.^[46]

The Post later reported in May 2007 that the layoffs appeared to be 'backfiring' and resulting in slower sales.^[47] The blog The Consumerist reported in November on a letter a former employee received from Circuit City, attempting to entice him to re-join the company, in a capacity "comparable to your previous role at the most competitive rate possible."^[48]

In April 2008, video rental firm Blockbuster announced a bid worth $1 billion to purchase Circuit City.^[49] In July 2008, Blockbuster withdrew its offer due to market conditions.^[50]

Philip J. Schoonover, CEO, President and Chairman of the Board of Circuit City Stores, Inc. announced his immediate resignation on September 22, 2008. James A. Marcum, former Vice Chairman of the board, was named acting CEO. Allen King was selected Chairman of the Board.^[51] This switch was said to be due to a stream of losses stemming from the rapid decline of flat-panel TV prices, and possibly due to the strong call for Schoonover's removal from activist shareholder Mark Wattles.^[52]

Final business model

In 2008, the domestic segment retail operations were overseen by the COO, John Harlow. Domestic retail operations were divided into 8 regions supervised by Regional Vice Presidents. The 8 regions comprised 67 districts, which were overseen by District Managers who regularly visited stores to monitor store operations and meet with store management.

Domestic segment superstores were typically staffed with an average of 56 full- 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.^[53]

• Home Entertainment Equipment: Televisions, DVD Players, Receivers, Speakers
• Imaging Equipment: Digital Cameras, Camcorders
• Technology Equipment: Personal Computers (PCs), Laptops, Monitors, Computer Accessories, Computer Software
• 12-Volt (Car Audio) Equipment: MP3/CD Player, GPS, Amplifiers, Speakers, Subwoofers, Overhead/Headrest Screens, DVD Players
• Entertainment Software: Music CDs, DVD Movies, Console Systems, Console Games, PC Games
• House Care: Vacuums, Air conditioners, Small Refrigerators
• Firedog Service: Home Entertainment Installation, PC Checkup / Installation and Car Audio Installation

Bankruptcy and liquidation

Removal of signage on a former Circuit City store.

On November 3, 2008, Circuit City announced that it would close 155 stores and lay off 17% of its workforce by the end of the year as a result of continuing difficulties in remaining profitable.^[54] On November 7, 2008, Circuit City laid off between 500 and 800 corporate employees from its Richmond, Virginia headquarters. The approximately 1000 remaining corporate employees were consolidated into one building in an effort to further reduce costs and improve profitability.^[55] On November 10, 2008, Circuit City filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code.^[56]

In bankruptcy court, Circuit City was approved to borrow $1.6 billion to finance operations while restructuring.^[9] Court filings revealed that the company had assets of $3.4 billion and debt of $2.32 billion,^[57] including a $119 million debt to Hewlett-Packard and a $116 million debt to Samsung Electronics.^[58] Chief executive James A. Marcum promised that the stores would stay open and the chain would not be liquidated.^[59][60]

On November 18, 2008, it was announced that Ricardo Salinas Pliego, current owner of Mexican television broadcaster TV Azteca, had purchased 28 percent of Circuit City.^[61]

On January 10, 2009, it was announced by a company spokesman that Circuit City needed a buyer by January 16, 2009 to keep from shutting its doors due to an approaching deadline set by the court and creditors.^[62] Although two unnamed parties were interested in buying out Circuit City,^[63] a bidder couldn't be found, so Circuit City started airing "going out of business" commercials, as they started closing all of their stores.^[3] The Canadian operations, which are run under The Source by Circuit City banner, were not initially affected by the liquidation, but were later sold to Bell Canada.^[64]

According to Circuit City's website, the company announced on January 16, 2009 that it intended to close all of its stores. Reportedly, over 30,000 employees lost jobs in the liquidation.^[65]

The final day of operations for Circuit City brick and mortar stores was March 8, 2009.^[66] Besides retail auto dealerships, Circuit City closed more retail locations in the U.S. than any other retail chain in 2009.^[67]

After the final date of operation for all Circuit City stores, the company's online store was replaced with a page that reads a follows:

"Circuit City would like to thank the millions of customers who have shopped with us during the past 60 years. Unfortunately, we announced on January 16, 2009, that we are closing our stores."

On May 19, 2009, it was announced that the Circuit City brand name, logo, and website had been purchased by Systemax Inc. for US$14 million, which had also previously acquired the CompUSA brand after the store chain's liquidation.^[68][69] Systemax relaunched the circuitcity.com website on May 22, 2009, as an online retailer of consumer electronics.^[70] The revived site's front page looks similar to the original front page, while other pages have a similar appearance and flow of Systemax's CompUSA.com and TigerDirect.com's pages.^[71] It sells the same products as the original website did before closing, with the exception of its car audio department. Systemax said there is a possibility that it could open up retail 2.0 stores (Circuit City stores) due to positive success of CompUSA stores.

In August 2009, Massachusetts-based advisory firm Streambank handled the auction of more than 30 million customer contacts collected by Circuit City from 2003 through 2009.^[72]

On June 1, 2009, it was reported that a famous hand-signed lithograph by Alexander Calder was found in a closet at Circuit City's former corporate headquarters in Richmond, VA. The lithograph was Number 113 of 120 and was titled "Wave." The lithograph was auctioned by the liquidation firm, Liquid Asset Partners, on eBay and sold for $1800 after 48 bids.^[73]

Hindsight

In August 2009, a former Senior Vice President of Best Buy, Don Eames, published an eBook titled Circuit City Six that analyzed major mistakes made by Circuit City.^[74]

Former brand names

• Anika
• CarMax (sold)
• Centrios
• Circuit City Express
• Circuit City Rewards
• ESA
• firedog (sold)
• i-next
• Impulse
• Liquid Video
• NexxTech
• NexxTech Ultimate
• Roadshop
• Sector 7
• Sens
• The Source by Circuit City (sold)
• Verge
• Wasaki

- All italicized brands were distributed by ORBYX Electronics.

Real estate holdings

Due to the expansion of Circuit City stores in the 1970s-1990s, the company 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), the company had numerous freestanding and in-line locations ranging from 2,000 to 50,000 square feet (180 to 4500 m²), and also surplus office, service and distribution locations scattered across the country. During Circuit City's 2005 fiscal year (March 1, 2004 through February 28, 2005), the company disposed of approximately 1.2 million square feet (108,000 m²) of vacant retail space.^[75] In January 2007, Circuit City's vice president for real estate announced plans to open 200–300 stores in the next two years, a large increase from the current trend of 10–12 stores a year.^[76] Due to the economic conditions the company faced, they did not reach that goal. Many of these stores, however, did open in 2008 and operated for only a few weeks before closing. Some were built and never opened and upon the company's declaration of bankruptcy, it was discovered that large expenditures were due to paying leases on buildings that were never even opened to the public.

Besy Buy

Best Buy CEO Brad Anderson commented that stores left vacant by Circuit City's bankruptcy presented a growth opportunity for his company.^[77]

Conn's

Texas-based electronics and appliance retailer Conn's opened in a former Circuit City location in November 2009 in Denton, TX. Conn's is looking to expand in other former Circuit City locations in the Dallas/Fort Worth area.

hhgregg

Indianapolis-based electronics retailer hhgregg is also taking the opportunity to fill the void left by Circuit City to expand its retail operations, including taking over empty Circuit City locations.^[78] hhgregg has plans for a large mid-atlantic expansion in the former Circuit City strongholds of Richmond, Washington, D.C., and Baltimore.^[79]

P.C. Richard & Son

In the northeastern U.S., P.C. Richard & Son has purchased 5 Circuit City locations.^[80]

Gallery

This article contains too many pictures, charts or diagrams, and is in need of cleanup. Please help to improve this article in accordance with the Manual of Style on images.

Circuit City store in Los Angeles, California, modeled after the 1988-1995 store design, with updated 2001 signage.	The Circuit City location in Huntsville, Alabama on the day after closing for the final time. This model is indicative of Circuit City store designs from 1995-1999.	Circuit City in Raleigh, North Carolina going out of business in February, 2009. This appears to be a 1995-1999 store design with a custom exterior	A Circuit City store in Rome, Georgia. Indicative of the 2000 "Horizon" store design, update shortly thereafter with new circle logo.
Closing Circuit City #3746, Johnstown, Pennsylvania. This model is indicative of Circuit City store designs from 2001-2007	A Circuit City store (St. Louis Mills - Hazelwood, Missouri, United States). Also indicative of the 2001-2007 store design.	Inside a "The City" location, Circuit City's final store design in 2007-2008	Inside a "The City" location, Circuit City's final store design in 2007-2008
A closed Circuit City store in Santa Cruz County, California. Also indicative of the 1995-1999 store design.

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External links

Wikimedia Commons has media related to: Circuit City

• Circuit City's Official Reopened Website
• The Source offical website
• Circuit City's Head Quarter's Liquidation
• Op/Ed Inside Circuit City’s implosion
• Circuit City website goes offline

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