Liquidated at Circuit City
Editor's note: This is part of a series of stories about the recession's effect on the tech industry.
Note: This article has been corrected to reflect that Ultimate Electronics is not going out of business, as previously stated.
When Circuit City management told employees to arrive at their respective stores one hour before opening in early November, everyone knew something was up.
Except T.K. Campo.
The 21-year-old wasn't able to go in early, and arrived at his job stocking shelves at the Scottsdale, Ariz., store to find his fellow employees just standing around, looking generally shocked and upset--and, conspicuously, not working.
That's when he got the news. "They told me we were closing down. From then, there was this giant, somber mood throughout the whole store. Everyone was going to lose their jobs, and people were really upset. At least one person was crying."
(Credit: T.K. Campo)Campo's store was one of the 155 stores that Circuit City announced it would be closing to get the struggling retailer back into good financial health. Overall, 17 percent of the workforce was to be cut. Just a week later, the chain filed for Chapter 11 bankruptcy.
The recession has claimed hundreds of thousands of jobs here in the U.S., but unemployment is having a secondary effect on retailers. It has killed consumer confidence, and hawkers of expensive gadgets like Circuit City, and Tweeter, have been hit hard.
As disappointing as it was for Campo to lose a job that he liked, this 21-year-old has more responsibilities than most of his peers working retail. He's a single father who recently won joint custody of his 2-year-old son. Campo is also putting himself through school, studying math with hopes of becoming a high school calculus teacher.
But his priority right now is making his child support payments.
"I can always take little break from school, but (working is) always to provide more for my son," he said during a telephone interview. "At Circuit City, I would have been able to move up, and eventually get more money. But that opportunity's kind of gone now."
Campo has been working at the Scottsdale store since May--he'd been laid off from his previous job as a line cook after he went on disability leave with a broken arm. But he took a liking to his work stocking shelves at Circuit City, updating prices, and interacting with customers. But most of all, he enjoyed his 40-some co-workers.
"I befriended just about everyone that works there. For the most part, everyone that's left is a tight group."
Over the past month the group has found more ways to bond since the news of their store getting shut down. Knowing that there is a definite end date to their employment, the store "became this relaxed environment," Campo said. If they can't help a customer, nobody stresses out. Some phones go unanswered, and just "general messing around" ensues.
But they know they still have work to do.
The liquidators--the company that bought up the store's debt and inventory--came in a few days after the announcement, put up store closing signs, and changed all prices to the MSRP (manufacturer's suggested retail price), then marked them down a bit more.
Once the signs went up, a frenzy of bargain hunters descended on the store. But not everyone liked what they saw.
"Some (shoppers) got rude, some got really nasty," Campo recalled. "Some people would come in and tell us we deserve to lose our jobs because they're not happy with our prices, and unhappy we couldn't alter prices or return things anymore that had been purchased after liquidation. Some were unsure what to do if they had purchased (extended) warranties. I don't know...it seemed like some people enjoyed being unpleasant to us. There wasn't a lot more we could do for people."
During the holiday season, stress levels tend to run especially high, which likely added to the customer frustration. Campo said his store doesn't update inventories anymore, or even get shipments, and they definitely don't try to find a product for a customer at a nearby Circuit City branch.
"We're technically competing with each other now," said Campo. That means getting rid of all the store's current inventory as fast as possible. "That way the liquidators can close us down faster. The longer we're open, the more money they can lose."
Campo, luckily, has already procured a new job, as a prep cook at a wine and coffee bar, which he's working simultaneously with his Circuit City position. Though he would have liked to have stayed in electronics retail, he found it impossible in his northeast Phoenix suburban community.
The local Best Buy isn't hiring, and another regional chain, Showcase Home Entertainment, is also going out of business. Looking for work in another industry was Campo's only option.
"It seemed easier since I have experience outside the field," he said. "But I'm worried for all my friends I've made."
There's a sign posted that says "6 days left" hanging in the store, he said. "In a week...I hope my friends have new jobs lined up."
Next in the series: Talking Apple in the land of foreclosures
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur. E-mail Erica.
Circuit City rarely had any of those factors in play, let alone all of them.
To top all that off, the local geek shops more often than not kept all its profits locally, which meant you put money into your community, and not to some corporate headquarters way out in BFE. Finally, they went out of their way to hire students and hobbyists who actually love the craft - folks who had a passion about computing... which may or (more likely) may not be the case with the typical sales-droid at Circuit City, BestBuy, or wherever.
I think Penguinisto's point though is pretty good. While there certainly are some local shops that try to con their customers a lot of them work pretty hard to satisfy their customers. They may not always have the best prices, but since they don't have huge advertising budgets they are more willing to try to work to make sure that everything works properly and that you are happy with your purchase.
That being said I think that there are other factors that nobody seems to be mentioning. One is that Best Buy eliminated mail in rebates as part of a settlement in a consumer lawsuit. Since trust in mail in rebates has gone down dramatically most customers only care about the in store price. Since most CC stores are near BB stores, if BB has the lower in store price a lot of people simply go to BB.
Another factor is the lack of commission sales associates. Back when CC still had commission employees cared if liked your purchase because if you brought it back they lost commission on the purchase and they actually wanted to help you find what you were looking for. While commission sales people can get pushy they actually have an impetus to care about their jobs and what they are selling. There was a joke on the NBC show Chuck, which is has the fictional electronics retail store BuyMore, by one of the employees of why should I care I'll get paid $10/hr regardless of how helpful I am and how any rewards for a good job will be lame. In most stores with non-commission sales associates the best case scenario is often that a guy who doesn't care about his job will offer to will help you, but be utterly incapable because he has no impetus to learn anything about the product because he will probably make the same wage and work virtually the same number of hours regardless of whether he sells anything. The worst case scenario is that employees avoid customers. As long as customers don't complain to a manager about an employee the employee will never hear anything negative from management. Ever since CC went non-commission they have been going downhill.
I think it's funny to see CC commercials on TV these days. Last desperate attempts to save the company. They need to let their service and experience speak for themselves though.
Employee was too much of a slacker to be on-time and punctual, misses getting laid off.
Creates self-promoting article and shops it to CNet, who willingly publishes.
Several times employees were staying busy texting each other, using their cells phones talking to each other IN THE STORE,etc,etc,etc!
It's no wonder CC is having difficult times, especially during the latest financial troubles!
I only go into stores to get stuff I need NOW! CC often failed, whereas Best Buy usually had helpful assistants to show me EXACTLY where I could locate what I needed NOW!
Say what you will against stores with commission (eg. Fry's), but in a commission sales floor employees trip over themselves to help you. I will agree that it can get really bad if the store has far too many sales associates relative to customers in the store where you have to beat away sales associates when you are simply window shopping, but between having sales associates who are a little over eager and "sales" associates and I use that word loosely who work under a system that encourages one to do the least amount of work possible when the manager isn't looking it is pretty clear what I am going to pick.
As long as there is no regular bonuses for selling things I think CC is going to have trouble. BB can muddle through without commission just as long they are perceived as being a good value, but even BB I think may eventually struggle because as more and more people turn to the internet BB 's retail stores just can't ride on the perception of good prices alone.
I sympathise with him, sure. But to portray this scenario as "the effects of the recession" is a bit naff as it happened to me months ago, and the country I'm in is not in recession.
Some people are cruel, telling the guy that they deserved to lose their jobs because "the prices are too high". It's all part of the "They're only out to take my money from me, so I'm going to treat them like dirt" mentality that is rampant in retail.
So 2 days later, I went back to price match a laptop from an Office Depot ad.
This other employee said he would not price match it because it was a rebate. Like what difference does that make when CC was using rebates too??
So I got my HP DV6775us at Office Depot instead.
As others have pointed out CC has been struggling for some time. The recession just pushed an already struggling company in bankruptcy.
I was able to get MCSE training and I now work in education as Technology Specialist because of my both my work experience and training, so things got better. It sounds like T.K. is on the right path and wish the best for him and for all those affected by this downturn.
they're all big box stores that treat their employees like dirt and pay them less than living wages.
no wonder service and knowledge at these stores stinks
As for knowledge, I will admit that Fry's has a lot of idiots working there, but the percentage of people at Fry's who knew something about what they sold is much higher than at BB or CC. I remember a lot of people at Fry's who were merely working there as a part time job while they searched for real work. I knew one guy who got laid off from Sun Microsystems who was merely working at Fry's to pay the bills until he found a programming gig involving Java. I knew yet another guy who quit Fry's to work on setting up a SAN for a local company. Good luck finding anyone at BB or CC who even knows what that is. I will agree that there are a lot of college age kids working at Fry's who aren't brain trust, but even the college kids who work at Fry's tend to be a cut above the variety working at BB or CC. I remember on multiple occasions customers when I worked at Fry's that customers were so impressed at my knowledge that they offered to pay me to work on their computers. I can't say I have ever seen anyone at CC or BB who I would have any confidence in working on a computer.
I will agree that you shouldn't expect a lot of smart people at your local Fry's, but you are FAR more likely to find one if you ask around the store, than if go to your local BB.
I thought most people learned a long time ago, "if you build it, they will come" is only the title of a good movie. You can't just put up a paint scheme and sign then load the building with inventory and send out flyers and newspaper inserts and expect to be successful......what a waste of a great business opportunity.
I partially agree with T_Tran, about the colors and such, but it's the registers that crack me up. They have to be close to 20 years old! This is the company that dumped appliances to focus on electronics, grocery stores have more advanced cash registers.
Price wise they are as competitive as most online retailers for major goods, TV's, computers etc, you wouldn't buy a video card there or RAM unless you were desperate. I would buy at Costco if I can, but if not they are not any different than most other places.
Kevin
~NT
Furthermore, I find the whole "customer centric mentality" is little more than marketing gibberish. The signs at BB tend to have minimal information and almost everyone I have met who worked there agreed that BB doesn't put much of any focus upon employee training or employee knowledge in hiring. From what I understand even Fry's put more emphasis on employee training, which is a pretty sad statement.
Finally, I don't understand the whole point of why you are sending stuff off to regional distribution centers? The only reason you would need to send a laptop off somewhere is if nobody at the store is really qualified to fix it. I think a good consumer service department would, I don't know fix things on site so I wouldn't be waiting for days and weeks for the repairs. Furthermore, local TV stations across the country doing consumer reports have caught geek squad agents selling parts and services that simply aren't needed to fix the computer in question. Either these Geek Squad agents are stupid or they are deceitful. GS is damned either way. Most consumers are better off finding a local repair shop with a good reputation. Their stuff will often get fixed faster and sometimes cheaper because the good shops don't try to replace things that aren't broken.
Also, wasnt it last year, or was it 06, that east coast or midwest GS employees were stealing pictures and music off customers hard drives and passing the more salacious ones around the office?
Can you trust any Geek Squad'er after that?
I will definitely agree with you on the oversaturation issue. I know BB stores that are literally within walking distance of each other. CC admitted in an SEC report IIRC that most CC stores are within 5 miles of a BB. There are a lot of markets that just don't need that many stores.
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by chrisx1
December 16, 2008 10:09 AM PST
- Having this as the top story and with that title makes it look as if this is new news and Circuit City has closed for good when it is really only the same stores that closed weeks ago.
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by mewen
December 16, 2008 7:10 PM PST
- no, sorry they are ALL going bankrupt!! At first it appeared just certain stores, now its all.
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