Circuit City: The Idiots Are Still in Charge.
November 11, 2008
A chronology of idiocy.
November 7, 2008
I walked into a Circuit City store yesterday. I wanted to buy a power cord for my printer. They did not have one for sale.
There were huge signs: "Going out of business! Prices marked down 10% to 30%."
Lots of things were not marked down. The things that were had 10% discounts. I did not see one item marked down 30%.
Meanwhile, retail sales nationally are collapsing -- the worst in decades. Stores are already marking down Christmas items. The New York Times reports:
"I've never seen as many 'percent off the entire store' promotions as we're seeing right now," said Kimberly Greenberger, a retail analyst at Citigroup who has been studying apparel sales and promotions for a decade. . . ."What we're hearing anecdotally from different retailers is that when they're putting something on sale at 30 or 40 percent discount it is no longer having an effect on consumers," Ms. Greenberger said. "They're having to cut prices 50 to 60 percent to get consumers interested."
Circuit City's pathetic 10% discounts are nothing. Yet 155 stores are being closed. The idea is to clear them out, right? To fire employees. To cut expenses.
You can't do this until the inventory is gone. The stores must be empty.
The store was nearly empty . . . of customers. Only a few people were looking. Yet it was lunch time.
Circuit City can't even go out of business efficiently. It never did sell efficiently. Look at the stock chart over the last year.
This recession will eliminate firms like Circuit City. A recession does not transform bad management in boom times into good management. It eliminates bad management altogether.
Yesterday, I ordered a big screen HDTV. I ordered from Amazon. I paid no sales tax. It will be delivered to my door in a few days. I got exactly the model I wanted at 24% off retail (not counting the sales tax saving).
Who needs Circuit City? Only its senior managers.
November 10 Circuit City files for bankruptcy.
Evening. I went back to the store to see what was happening. The signs offering 10% to 30% discounts were gone, replaced by signs offering (up to) 20%. In short, they got rid of any deals that might have been available before the declared bankruptcy.
Nobody was buying. Lots of shoppers, drawn in by the Closing Store banner.
Idiots. Utterly incompetent, doomed idiots.
Then there are GM, Ford, and Chrysler.
We are headed for the worst recession in the post-war era. The idiots will either be bailed out by taxpayers or will disappear. They will take ten million jobs with them, I think. If you think I am exaggerating, read this (which needs to be printed out.)