Op/Ed Inside Circuit City’s implosion

circuitresizedBy Elizabeth Barron

Not all of us come with a built-in Intel processor, but the current economy has forced me to step up my cognition. On Friday, Jan. 16, I waited anxiously with my Circuit City colleagues for news about the company’s future. We paced back and forth. We chewed on leftover holiday candy. We asked, “What do you think will happen?” over and over.

We knew the announcement would hit the Internet before the company could issue an internal statement, so we scanned news sites obsessively. We saw it on CNN first: “Circuit City to shut down remaining stores.” The scene that followed was one of directors crying in bathrooms, teammates thanking each other for hard work, shocked associates re-reading their computer screens, earnest hugs and lots of boxes.

The Nov. 7 layoffs had prepared us, sort of. Putting holiday planning on hold to watch throngs of associates escorted out the front door forced each of us to do a gut check. We were saying goodbye to people who baked us birthday cakes and made us laugh over cubicle walls. We were slimming to a bare-bones organizational structure; innovation projects would be paused, budgets killed.

All of us had co-workers who had seen change coming and left over the summer to pursue new dreams or more stable opportunities. We read about the dismal retail forecasts and expected more cost-cutting measures to come after December. Those of us remaining needed to brace for what was ahead.

The rumors were grim, but my immediate colleagues and I thought Circuit City would eventually be okay. We didn’t think it was possible for a company with such strong brand recognition to just disappear. We speculated that an investor like Mexican billionaire Ricardo Salinas Pliego would take the company private. The new owner would replenish store inventory for short-term success, then reposition the company for long-term viability.

Were those of us who stayed on board until the end stupid, lacking alternatives or optimistic? Were we like my colleague Sean Cloney, so involved in our work that we didn’t want to jump ship? Recently he explained it to me thus, “In the weeks preceding, I actually felt really good. I didn’t apply to any jobs. I thought that we’d be bought and kept as a whole. I wanted to stay with the company when others left because I loved the people in my group and my position there.”

We had cool jobs, talented co-workers and hope. Of course, not everyone felt as a good as Sean in those weeks preceding. The night before the announcement I had my first dodgeball match for River City Sports & Social Club. So concerned about what the next day would bring, I wept nervously in the car until my teammates persuaded me to leave the parking lot and come play.

I touched base recently with another colleague, Michael Laskaris. He described the pre-announcement atmosphere: “I kept myself purposefully uninformed and ignorant – if I had read all of the dismal business news about Circuit City, I would have gone insane. … There was a lot of tension in the air during the last week, and it was hard to concentrate as a lot of this was going on around us. Main emotions: worry and anxiety.”

I knew the economy was tough, but I also knew the company had a new, strong leadership team that could get things done. Amid abandoned cubicles and whispers in the hallways, they endorsed a vision of sincerity, smart choices and customer service. Notably EVP and COO John Harlow, EVP Jeff Stone, and acting president and CEO Jim Marcum were straight-talkers willing to articulate painful realities. We have a lot to fix. Customers are not being greeted and treated with respect. There are inventory issues. Supply chain issues. High store associate turnover rates.

My department, New Concepts and Training, trusted the leadership team wholeheartedly and threw ourselves into the work of creating the 2009 training curriculum. We were taking Circuit City store associates back to basics, emphasizing guest service in every aspect of their training modules. We became known as “The Band on the Titanic.” We wanted to help turn the company around. Like many associates still working at the headquarters, we believed we could.

But time ran out. Here’s how Michael remembers it: “We were waiting for an announcement that morning, and I continued to work on a design project. My co-worker interrupted me: ‘Looks like everybody’s packing up their things,’ he said. I looked around, and sure enough, people were grabbing bags and boxes, filling them with personal belongings. My immediate reaction was, “Isn’t this a little premature? This news may not be reliable.” Then, about 30 minutes later, we were informed that the company was liquidating. I experienced a quick second of shocked acceptance and resignation: “Oh. We’re done. That’s it.”

We were informed of a communication meeting in a few hours. The executive team would share the official news and help us understand what would happen next: When would our pay and benefits end, and when should we stop reporting to the office? Not all details had been worked out, so our directors asked us to come back on Monday. Exhausted from not being able to sleep the night before and stunned, I went home for the day.

Circuit City was my first “real” job, so I expect I will always treat it with privileged respect and nostalgia. And I know I have it easy; I’m only 26, and my time there just spanned three years, while some colleagues are parting with careers almost as old as me. In many Richmond households, both parents worked for Circuit City; some of them actually met while working for the company.

Where did we go wrong? Did it really come down to the intersection of brutal macroeconomic forces and poor customer service? And as we look ahead, what industry is secure? The stores and cubicles of Circuit City are slowly emptying, people are making plans to move or downsize, and I’m trying to remain optimistic about the future.

Elizabeth Barron was a training designer for Circuit City Stores, Inc. She is actively looking for a new job.
She can be reached at [email protected]

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gnomc
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gnomc

Elizabeth, This may have been a surprise to you, but to anyone who took my class in a Richmond business school in the last 3 years, the only surprise was the timing. As part of my class, students pick companies to analyze. Not the balance sheet, but the management and strategy. The management of Circuit City was so bad, it became the punchline to jokes. More than one student asked why the board didn’t fire (or execute) executive management. My question is why the board didn’t fire themselves. Perhaps with some distance from your first job and some experience to… Read more »

Natalie
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Natalie

Elizabeth, I worked for Circuit City for over 24 years. I worked very hard over the years for this company and I just didn’t think it would come to this. Call me stupid or call me optomistic – I just didn’t believe it… I have a hard time believing it still. I was planning on retiring in 7 years. I lost 6 figures in stock – really hurts – I know executive management wasn’t doing what was right but I had seen times in the past where we were on a rocky road but we eventually got back on track.… Read more »

Kathy
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Kathy

I enjoyed this article. It’s all so sad.

Carmen S.
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They should’ve revitalized the brand. There was things they could’ve done that would’ve fixed them right up.

Marsha Killington
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Marsha Killington

Customer service at CC had gotten so bad by the last couple of years that it was a truly jaw-dropping experience just to witness it. I came to believe that salespeople had been hired at random off the streets and put on the job with no training at all. I suppose CC could be a business-school case study about how to ruin a company.

Elizabeth
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Elizabeth

I’m glad they went out of business 🙂 Circuit City was a very arrogant company. The use to laugh and snicker at Best Buy in many meetings saying that BB could never beat them in marketshare. Their prices were always 10-15% higher than other retailers and their “extended warranties” were nothing but a rip-off that added almost 40% to their bottom line.Their hiring practices were way to intrusive and their training SUCKED. Good riddance!

All hail Best Buy!!!

Josh
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Josh

Well Elizabeth I now you wont read this considering I’m responding half a year later but I think the jokes a bit on you with your comment. Firstly Best Buy’s prices where often higher especially on services. And Best Buy used the same warranty company as Circuit City so I guess you’re saying Best Buy’s warranties are just as much of a rip off as Circuit City’s ever were. I’ve been to many a Best Buy and there may be 2-3 people in the entire store who has any clue about anything in their department let alone their store. Best… Read more »

Zak Enroller
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Zak Enroller

Hmmmm, I worked at a Circuit City Express eons ago and I remember we had to sign the arbitrage thing at the Pentagon City Store. Making that two percent was a big deal. Things like “spiff” were the big ol’ commissions.

I miss those days.