Circuit City Stores Inc. (CC)
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- All Comments on CC
- General Discussion on CC
- Circuit City Still for Sale - Who'll Buy It? [view article]
- Circuit City: Outlook Is Grimmer Than Ever [view article]
- A Look Back at Circuit City Stock Performance [view article]
- Circuit City Leads Best Buy in Site Visits, but Lags in Conversions [view article]
- Brand Names: Important, But Not Key to Investment Decisions [view article]
- On Short-Sellers and Dishonest Executives [view article]
- Transformation in Retail Shopping Gains Momentum [view article]
- Can One Profit From Poor Customer Service? [view article]
- Circuit City Needs a Management Overhaul [view article]
- Who Can Buy Circuit City AND Successfully Turn It Around? [view article]
- Circuit City Heads Towards Zero [view article]
loading ...Recent CC Articles
- A Look Back at Circuit City Stock Performance
- Circuit City Still for Sale - Who'll Buy It?
- Brand Names: Important, But Not Key to Investment Decisions
- Circuit City Leads Best Buy in Site Visits, but Lags in Conversions
- Circuit City: Outlook Is Grimmer Than Ever
- Blockbuster, Despite Progress, Posts Another Loss
- On Short-Sellers and Dishonest Executives
- Transformation in Retail Shopping Gains Momentum
- Can One Profit From Poor Customer Service?
- Blockbuster Drops Circuit City, Retains Hybrid Stores Strategy
- Full List of Articles »
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Circuit City Still for Sale - Who'll Buy It? [view article]
I still think that it's too late to engineer a turnaround. The only value I see in the business is its breakup value if some of the stores are in good locations. Then, there's value in the underlying leases. As we've noted previously, the company leases all but 5 of its stores.If shrinking and refocusing to cater to upper income shoppers is part of the turnaround strategy, it may work. (Make 'The City' the new brand, and close the subpar superstores that are draining the company's balance sheet.) Unfortunately, if CC does that, it will probably face higher prices from its major suppliers, because it won't need the same inventory level it does now. Which will further shrink its gross margin.
If Mr. Marcum is tough enough to make the decisions to close underperforming stores, then the company won't have to sell to a hedge fund to accomplish it. On the other hand, if it's business as usual, forget any return on investment unless you get a breakup fee for your trouble. Reply
Circuit City Still for Sale - Who'll Buy It? [view article]
Mr.Bhaskar's comments are rough and tough but it is true that any organisation to become a successful one has to have three Ms on the top.and that is the first M ( Men working in the organisation) is misssing in CC with other two Ms ie machine ( quality product) and market (demand )are upto the highest leval.Mr Marcum should have noted this point. ReplyCircuit City Still for Sale - Who'll Buy It? [view article]
mmmmzzzmzm ReplyCircuit City Still for Sale - Who'll Buy It? [view article]
Mr. Bhaskar's comments are rough and tough but has hidden truth that three M's will work in any successful company and the first M ie Men is the missing factor in CC when other two Ms like machines (product with quality) and Market demand are upto the mark.Mr Marcum.should have also noticed this factor.. ReplyCircuit City Still for Sale - Who'll Buy It? [view article]
Mr.Sullivan, Blockbuster's offer was just the manuplated offer with the help of some moneylaunders and scoundrels in the bootleggars society.If it had come through that would had been the worst moment not in the history of CC but inthe whole American business community.CC is the pioneer co in the retail market (sply in the electronic goods) and has done lot of contribution to the growth and development of the society,given very high returns to the shareholders and I am sure CC will definately come out with good results.Mr.Marcum will have' kick in the back and carrot in front, policy and drive out many inefficient,fat salaried,mentally disabled staff members,close down non profit making outlets and inject heavy dose of insulin in lost energy personnel.and implement the comtemporary business practices like having association with Financial corporations dealing in Credt cards,Insurance and Banking business where CC can hold on their money (Strength of 37000 emplyees,$12 Bn sales and assets and stocks,share holdings worth ** is not a small figure)This is enough Mr.Marcum and go ahead and hit the target. ReplyCircuit City: Outlook Is Grimmer Than Ever [view article]
I agree with the conclusion of Sullivan - this is one of the most hopelessly and cluelessly managed companies of the modern era. The mixture of arrogance and ineptitude in the exec suite rivals that of Ford, or maybe some of the mortgage brokers that buried themselves.Best Buy is not great, but they run circles around CC and have for years. I used to comparison-shop the two, but now don't even bother. I buy some stuff online, now more than a few years ago. It is easier and cheaper, and I actually find the level of customer service better through a phone connection than live-and-in-person at BBY or CC. Amazing, but true.
I have probably spent over $20,000 at BBY over the last 15 years, and less than $1,000 at CC. That tells you something - the price points and selection just aren't there. It reminds me of a K-Mart - cheesy, low class, not where I want to shop.
I expect CC to be a BK within 6 to 7 months - this Xmas will be brutal; the weaker dollar means higher costs, less traffic, and a poor season for most retailers. The electronics guys may get a break from the sales of digital TVs as analog goes offline, but that's the only goodie in the stocking this year for them, I'm afraid. Reply
Circuit City Still for Sale - Who'll Buy It? [view article]
Sullivan is right. Too much hassle involved with making an offer. Further, there is even more hassle in trying to make something of it once you have it. That leads to the obvious question: "What's left of any value in this company?" Bill is right. Fundamentals stink. Land and lease costs are crushing them, yet they're still talking about opening new stores. Not a logical strategy when the only bright spot in the story seems to be that their website is getting more hits lately. Trying to build market share by spreading yourself thinner is an interesting strategy. Given the pathetic performance over the last several quarters, does anybody know how they're planning to pay their suppliers? More debt? So much for cutting costs, unless interest expense somehow doesnt count. Or is the escape plan already in place where the creditors take the thrashing? It's the worst company in a tough, highly competitive market in a scary economy. With regrets to the few dozen or so remaining loyal customers and irrepresibly optimistic CC investors, there is no redeeming aspect that makes this company appear to be worth salvaging. If Mr. Marcum can turn this one around, he should be knighted, sainted, worshipped and adored for time eternal. But I kinda think that he'll settle for the few million bucks he gets for trying. ReplyGeneral Discussion on CC
Yup, they wrecked the company, but the top brass still is collecting milliions. Total corruption and incompetence.It is time to throw them out. Simple. As for a future, who would want to buy a low margin business, dominated by BBY, competing with Sams club, Walmart, Target, and all the others snatching up the biz. And then there is the internet.
Maybe the corporate vultures can find some value in CC, in some piece, but it isn't going to look like CCdoes, or did, when back in the late 90s' they were king of the business and BBY was close to biz.
So when I say corrupt, I say that the top doesn't know what to do, the people below them in headquarters are probably just hanging on, and why bother trying - the obstacles to success are all over - their market is the people who want cheap, cheap. Their employees - lots of them are just kids, some quite capable, but many not so. And the store turnover is enormous, so no one ever knows what is going on, and the customers sense this problem
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A Look Back at Circuit City Stock Performance [view article]
To ddh,Apparently, people appreciate personable, knowledgeable staff, even if they're not on commission. Which would help explain why BBY has shown sales and profit growth over the past 3 years while CC has shown the reverse.
As for the commentary, I believe it's spot on. A cash rich hedge fund (they're out there) would close the stores that don't perform, forgo any attempt to continue the big-box idea, and turn the business into a boutique chain selling to high income people.
Or just sell off the leases and hope for the best. Either way, the company is done.
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Circuit City Still for Sale - Who'll Buy It? [view article]
To User 251231,Thanks, I appreciate your comments. It's too bad that CC has run aground, and the execs are exchanging chairs. There's a 'superstore' near my office, and the Verizon kiosk routinely has more customers than the rest of the store.
The location of the store is terrible. It's on the back side of a mall, obscured by a Safeway, TJ Maxx and a big box shoe store. Immediately south is a WMT complex including a Sam's Club with gas pumps (it's jammed, too). Next door to CC is a Sports Authority (the third sporting goods retailer to try that spot--the others went out of business). But the lease on the CC runs for another 12 years, or something ridiculous. Termination costs would be immense.
I think that's what's happening all over the chain. Poor locations, bad lease terms, low store traffic, poor service.
And Schoonover still has a job. Amazing. Reply
Circuit City Still for Sale - Who'll Buy It? [view article]
Bill said it correctly. When the vendors stop delivering and the credit dries up CC is toast. I was in a CC store yesterday. It was rather scary to see a "super store" virtually empty at 12 noon on the week prior to school starting. This is a store in Orange County, Calif. that even in a recession has a lot of disposable income. The Staples store next door was packed with customers buying laptops and other expensive items. Not so at CC. I get the feeling that most folks already know that CC is close to bankruptcy and they don't want to have warranty problems if the store is not going to be around much longer. It is sad to see such a once great store chain mismanaged into oblivion. Let us all hope that whoever picks up the pieces afterwards will at least keep the name. ReplyA Look Back at Circuit City Stock Performance [view article]
The assumption is that the sales people terminated were 3400 of the "most successful" sales people- this is evidently determined by highest paid- even though BBY had already implemented this strategy years before and has been successful with the low wage help. Could it possibly be that the margins on warranties evaporated and that pressure tactics (for commissions) were destroying customer goodwill? I think you and others are failing to denote this has become a commodity business and technology is changing so fast that products life cycles are rapidly declining. This harping about customer service and knowledge is greatly exagerated and is not confined to CC-I see it at BBY, i don't need the initial greeting to help my self esteem . As to the CEO, I agree he had lost his moorings, but unlike you I don't lose patience . ReplyCircuit City Still for Sale - Who'll Buy It? [view article]
I'm in Mr. Sullivan's corner on this one. Book value/share looks good until you factor in the costs for terminating leases at underperforming stores, brand damage done by poor customer service over the past five years, and consistently poor fundamentals (negative FCF, shrinking cash balances, lower gross margins quarter after quarter, operating losses in the 4th quarter).All that's left is to have vendors stop supplying product, and the swan song will commence. When the credit line is used up, CC will be done. Reply
Circuit City Still for Sale - Who'll Buy It? [view article]
Sullivan the self described value investor thinks WalMart,Sears and Target are electronic retailers-(see his recomendations) this is as big a joke- as his commentary. And how many years experience does Mr Sullivan have in big electronci retail? More trash talk while promoting retailers that carry (electronics) obsolete merchandise, absolutely no customer service and whose experience in electronics is non-existent. The fact is Sears cannot even install the appliances they sell, and Target if you have been there recently, is now just carrying Walmart merchandise at a higher price. (the word is spreading) Is Mr Sulivan a momentum investor or a value investor?-with CC book value over $7 a share and a billion credit line- his comment regarding BK is just plain irresponsible -maybe he should go take another look at Sears- stocks he is actually promoting and maybe concentrate more on fundamentals that have something to do with "value investing". ReplyCircuit City Still for Sale - Who'll Buy It? [view article]
As a consumer (and somebody who buys a LOT of electronics), I can't honestly say I've ever done business with CC. Most of my in-store purchases are done at Best Buy. And given the nature of this article, I suspect I'm not alone. Reply