Just a week after announcing they would close 20% of its stores, electronics and computer retailer Circuit City has announced it will file for Chapter 11 Bankruptcy. They cited the poor economic conditions, such as problems with credit, as the main cause of the bankruptcy. According to a post from Gothamist, the company had fallen “victim to tighter credit terms from vendors and a loss of market share to Best Buy, Wal-Mart Stores, and other rivals.”
But let’s not forget that Compusa just went under last year. Was Circuit City so unable to capture the leftover market share? At the time, I had praised Circuit City for being a generally better store, with a tighter, cleaner, and more focused operation. They didn’t focus as much on PCs, but rather on video game consoles and peripherals, which are very profitable compared to full-price computers. I honestly thought Circuit City had their game together.
In this case, it seems the culprit was genuinely the economy. I know that I haven’t bought a gadget all year, which is rare for me. I don’t think I even set foot in a big box retailer unless you count a frantic last-minute run to Staples for printer ink. With the oddball credit system collapsing on itself, and the fact that folks are honestly buying fewer electronics, it’s logical, but a shame all the same.
Oddly, Best Buy has seemed to weather the storm. I wouldn’t have thought so simply because Best Buy has no focus. Yes, they sell video games, and mobile phones, and printers, and computers, and televisions, and washing machines, and toasters, and CDs, and you get my point. Conventional wisdom says that in tough times, brands need to define themselves and build a strong following based on core values, but the opposite seems to be working for Best Buy. Maybe it’s their new logo.
So Circuit City, will you miss it? Were you a shopper there to begin with? And who’s next?