Circuit City To 'Double Down' On TV Sales, Firedog Unit To Power Comeback

In an exclusive interview with the Wall Street Journal, Circuit City CEO and Chairman Philip Schoonover said the changes being made to his company's structure are the "middle act of a three-act play." Though the company plans to lay off approximately 850 employees, eliminating an average of one management position at each of its 650 plus U.S. locations (the focus of both Reuters and MarketWatch's pieces summarizing the WSJ story), Schoonover said the company will actually be adding more jobs than it eliminates, due to another 150 planned location openings, as well a 50% increase in the size of its Firedog TV and computer installation and services unit. Circuit City plans to focus heavily on TV sales and ad-ons, currently 32% of its total sales (vs. just 20% for rival Best Buy) in its attempt to return to profitability. Weak TV sales dragged the company into the black during its latest fiscal year, with the prices of top models falling by as much as 40%. According to Schoonover, "There are only 10% of households that have true high-definition TV service today. This is a massive opportunity."

Sources: Wall Street Journal, Reuters, MarketWatch
Commentary: Circuit City Short Circuits On Weak Flat TV Sales • Circuit City: Firing Best Sales Staff Not Good Plan • Wal-Mart Leans on Electronics Retailers; Brings Skype to Stores
Stocks/ETFs to watch: Circuit City Stores Inc. (CC). Competitors: Best Buy Co. Inc. (BBY), RadioShack Corp. (RSH), Wal-Mart Stores Inc. (WMT), Costco Wholesale Corp. (COST). ETFs: Consumer Discretionary SPDR (XLY), PowerShares Dynamic Consumer Discretionary (PEZ), Vanguard Consumer Discretionary VIPERs (VCR)
Conference call transcripts: Circuit City F4Q07 (Qtr End 2/28/07) Earnings Call Transcript
Related: Firedog

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Comments

[Sr. Pessimist:]

They're doomed.

2007 May 31 05:05 PM

[Risk Arb:]

I agree, unless they get bought out. The chances of that happening are the only thing propping up the stock.

2007 Jun 02 11:54 AM

[timmyd1227:]

I was one of the lucky who got fired by Circuit City recently. From what I have read I and about 849 other Managers were all fired this past Wednesday. This is a company that I never missed a day of work for since I started with them. I cant think of any bad write ups in my file. It was all about saving a mighty dollar. Can I be one of the first of many former employees to tell Circuit City where they can stick there job! People beware! These are new times........or are they? Employers have won again! Good job circuit sh*ty! Way to stick it to the man. I hope this company folds so quick and your Firedog burns in Hell

2007 Jun 04 10:41 PM