Circuit City went bankrupt during this difficult economic crisis. There are many reasons why Circuit City failed. First off, it dumped sales of many popular appliances. Secondly, when it spun off Car Max, it let a lot of talented management go. Therefore, without proper management Circuit City began to fail. Another reason Circuit City is now out of business is because of Best Buy. Best Buy became more innovative and popular than Circuit City. Additionally, Costco was another one of Circuit City's competitors (Bnet.com).
When Circuit City knew they were hurting for business, they tried to save money and stopped paying commissions to their sales people. They also let the majority of their experienced sales associates go and commercial credit became very tight. This did not help at all. This is another reason why Circuit City is now out of business (Bnet.com).
As you can see from Circuit City going bankrupt, the economic crisis we are now in is affecting the retail industry greatly. When Circuit City failed George Whalin, president and CEO of Retail Management Consultants said"This is very significant. It shows you how bad things are for the retail industry" (CNNmoney.com). Hopefully the retail industry will start to improve as soon as possible. Circuit City is not the only retail business to declare bankruptcy. Many other retail business such as Clarie's, Linen-N-Things, Sharper Image, and many more have also failed. Hopefully we will start to see a turn around in the retail industry soon.
http://blogs.bnet.com/ceo/?p=1493
http://money.cnn.com/2009/01/16/news/companies/circuit_city/
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