Circuit City

Circuit City originally opened as Wards (completely unrelated to Montgomery Wards) in 1949 in Richmond, Virginia. The chain sold appliances and jumped into the new market of television sales. They managed to grow to four locations in Richmond, VA by 1959. The chain was doing quite well in the electronics market expanding their business to East Coast of the US and California. At the same time Wards operated a mail order company under the name “Dixie Hi Fi”. This greatly increased product flow for the electronics side of the company. Wards then made the decision to expand into malls under the names “Sight-n-Sound” and “Circuit City”. In 1984 Wards officially changed their name to Circuit City and was listed on The New York Stock Exchange. Circuit City continued to grow and expand their chain. They were known for having exceptional service, although sometimes being a bit pricey. The huge profits obtained by the chain allowed Circuit City to invest in other ideas like CarMax a car super store chain which is still operating today. Circuit City also invested in other operations such as the DIVX DVD rental system (not related to the codec), Firedog a tech support service, and Circuit City Express a mall based chain that specialized in Cell Phones, not unlike Best Buy Mobile except beating them out by 20 years. In the early 2000s Circuit City’s locations were beginning to become outdated when compared to the competition. The company decided to move away from their bread and butter which had been the large appliance business and focus more on consumer electronics. The remodeled stores utilized a layout similar to Best Buy and moved focus from direct interaction with sales people to grab and go items. This shift in focus was initially quite successful. The direct focus on electronics also prompted Circuit City to push sales of warranties. This was exacerbated by commissioned sales staff with bonuses for every warranty sold. As online shopping started to become common place Circuit City began to take a hit in business. The items which had become their focus general electronics, could often be bought online for a fraction of the price of the in store items. As this happened and business slowed down this caused the quality of items sold at Circuit City to drop and the sales staff to become pushier. More and more business took place online. The company decided to try to rebrand their stores and take their sales force off the commission system. The new store were called “The City” and featured open, bright floor plans. Not unlike current Best Buy stores. Many new locations were planned and being built, when the company unexpectedly announced their intent to close a majority of their stores in 2008, with the closing of final locations taking place in earl 2009.

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