TEAM No 4

Sarang Banubakde

Manpreet Singh Chabbra

Richard Sharp Era

Marcum Era Schoonover Era

McCollough Era

In 2008 liquidated 155 US stores and lay off

8000 employees.

On November 2008 filed for chapter 11 bank-

ruptcy protection.

On Jan 16,2009 circuit city forced to Liquidation

and accepted bids from 4 liquidator Great Amer-

ican group WF LLC,Hudson Capital Partners LLC,

SB Capital group LLC, Tiger Capital Group LLC.

Largest Retailer to fall in 2008 financial crises

1980 sales reached $120 billion and operating

profit of $4.9 billion

Listed on New York stock exchange .

Circuit City grew rapidly with 96 superstores

and 23 regular stores by 1989, with sales of

$1.7 billion and operating profit of $123 mil-

lion.

Introduced firedog(SM) internal technical help staff, to

enhance customer experience.

5% sales increased in same store sales,but suffered loss

of $116 million

Shut 64 Canadian Store & operating income felt by

51%..

Net loss of $320 million and share sunk to $4.2 per

share

3400 employees replaced with low apid workers

Faced aging and fading brand image

Aggressive pricing by competitors and failed to com-

ply on that.

Closed 6 distribution centers and laid off 1000 em-

ployees.

Hired FCB for rebranding and in 2006 after huge

turbulence sales rose to $11.6 bn & OP $211 million

Pioneered the electronics superstore format in the

1970s

At the time of liquidation, Circuit City was the second

largest U.S. electronics retailer, after Best Buy.

Large stores about 30,000 to 40,000 square feet in size.

Everything offered was on 30 days money back guaran-

tee.

If the customer could find the cheaper deal they would

get 110% of the price back.

Commissioned sales counselors were trained to provide

expert advice.

Service and repair departments were available in store.

Fast access to credit was part of the offering.

Customer Satisfaction surveys would keep everything

on track

Reve-

nue

Profit Year Reve-

nue

Profit

$12.6b

n

$541

mn

2000 $12.5

bn

$ 539

mn

$ 10.5

bn

$ 323

mn

2001 $15 bn $ 548

mn

$9.6 bn $ 237

mn

2002 $19 bn $946

mn

$9.8 bn -$89

mn

2004 $24 bn $ 1.2bn

$ 11.7

bn

-$320

mn

2008 $40 Bn $ 2.2

bn

Then Circuit City stopped selling appliances. It didn't

move as aggressively into gaming as it should have

It missed out on big in-store promotions with thriving

companies like Apple Computer.

Circuit City neglected to improve its Web presence,

just as online retailers like were hitting their stride.

They had been unable to move their inventory .

Circuit City became complacent — a fatal mistake in

the fiercely competitive and fast-evolving retail-

electronics industry .

Shutdown cost and employee layoff and addition of

new employees (required traning) added to negative

profits.

Exhibit 2-d inferred that debt capital ratio was conti-

nuslouy snoring , led to WC shortfall.

Aggressive discounting made it more vulnerable to-

wards bankruptcy .

Huge turbulence in management.