On March 8, 2008 I received a comment in an article I had written about Circuit City – Firedog services, in which a reader by the name of John indicated his experiences as an employee of CC. His comments in which he described a lack of training, long hours and in general a lack of job satisfaction brought to light that all may not be well for the #2 electronic retailer. I found this article from siliconvalley.com which states:
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.
I think my concern would be how long CC can hang on in a economy which is either in a recession or heading for one. If one did make a purchase from CC with the purchase added an extended warranty, how would one collect if CC closed down? Just a thought.
John’s comments are here.
siliconvalley.com article is here.
[tags]circuit city, retailer, electronics, credit line, sales, firedog, competition, company, [/tags]