Infographic fall of circuitcity Case study solution by Manpreet Singh digital

1. 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.