Don't forget to check out the video too......
"Circuit City employees were ordered to give this a REALLY hard sell to anyone they talked to. There were a lot of flat-out lies such as telling customers the Star Wars movies (or any other mega-popular title that wasn't on DVD yet) would be available on it exclusively. They were threatened with being fired if they said anything negative about DIVX"
This whole sleazebucket company was based upon fraud and deceit at every level, and as such "cowboy" was always their perfect spokesperson....
Sharp dumped all his FLEX at $10, then it went straight to $1.
Sharp dumped all his CROX at $45, it soon went straight down to $1 too.
Throw in his CC dumpfest at $72 and the Sharp Dick Man is akin to a shortsellers' lifetime employment act.
This kind of stuff simply doesn't happen by accident, not three times in a row?
(Cowboy would probably break out in hives if you just threw a nickel of honest net profit into his boiler room cubicle?. Wherever he works now I bet that they must lose money like crazy and lie to their own stakeholders on a daily basis as well?)
No wonder Dick Sharp dumped $50 Mil worth of CC Turd Stock at $72 per share the very week before he pulled the plug on the DIVX disaster. CC would go from that absurd stock price right down to $7 in the following 18 months too.
The whole reason that CarMax exists was so that this lying a$$hole would have a brand new stock symbol to dump under.
Since then he's been named in Class Actions as an outside director at both FLEX and CROX too. Don't go looking for other outside Directors anywhere who dump tens of millions worth of option stock at companies where they were built on
A: Staggering restatements (FLEX)
B: Bogus Patents and unheard-of Insider Dumping (CROX)
(To think that "cowboy" even had his teeth filed down at the time just to keep this man happy too?)
(Of course having no-talent asslickers like "cowboy" infesting their business had a whole lot to do with it too!)
Anybody with an ounce of dignity and self-esteem should have been out of this place by 2005 for sure.
The author here traces it all the way back to the DIVX flim-flam and quite correctly too.
Too bad he misses the part where the stock-dumping Retail Ape Management in Deep Run essentially gave Best Buy a two year head start in the most successful product rollout in Consumer Electronics history.
Lessons from Circuit City’s bankruptcy
By Chris Meadows
As Circuit City commences liquidating its remaining 567 stores this weekend, it might be worth TeleReaders’ while to check out the sales and see if there are any good bargains to be found on e-book readers or PDAs or netbooks that can be used as such.
But it is also worth considering the lessons to be learned from Circuit City’s failure.
Some would say that Circuit City’s road to bankruptcy began ten years ago, when it bankrolled DIVX (Digital Video Express), a digital video disc format that semi-competed with the fledgling DVD. An expensive failure, DIVX in some ways predicted such digital rights management (DRM) controversies as those that dogged Spore.
Unlike DVD, DIVX offered a minimum of special features, pan-and-scanned video, and a singularly obnoxious DRM system that insisted on phoning into centralized servers every time a movie was to be played to make sure viewers had permission to watch their time-limited movie disc.
The idea was that it was meant to replace video rentals rather than video sales—you could “re-rent” a disc in your possession without having to bestir yourself from your sofa—but then, as now, consumers had the funny idea that once you buy the medium, the content should be and stay “yours.”
In the end, DIVX folded and the DIVX authentication servers went dark (presaging the similar fates of Microsoft, Google, and Yahoo music or video DRM servers more recently), and every DIVX disc that had ever been sold became unplayable. This cost Circuit City a great deal, both in investment losses and in good will from those who had bought into its boondoggle.
Lesson: Consumers aren’t inclined to give up their ownership rights just because media and corporate interests think it might be a pretty neat idea.
More recently, Circuit City changed the pay scale for its sales—eliminating commissions and laying off 3,900 salespeople in 2003, and then in 2007 laying off its 3,400 highest-paid salespeople because management bean-counters thought they were costing the company too much.
The latter layoff was especially crippling, because the highest-paid salespeople were naturally the best and most-experienced salespeople. Without its top sales staff, the quality of Circuit City’s customer service tanked and sales naturally slowed.
Losing experienced sales staff would be bad for any business, but especially one that makes its money by selling such expensive items as home theater systems and large-screen TV sets. Wrote the Washington Post:
"I think even though sales were soft in March, this is clearly why April sales were worse. They were replaced with less knowledgeable associates," said Tim Allen, an analyst with Jefferies & Co.
In particular, the televisions showing disappointing results are "intensive sales" requiring more informed employees, Allen said. "It’s a big-ticket purchase for somebody. And if they feel like they’re not getting the right advice or are being misled by someone who doesn’t know, it would be definitely frustrating. They will take their business elsewhere."
From then on, it was only a matter of time. Once a retailer’s slide into bankruptcy begins, it is extremely hard for it to pull itself out—suppliers have no reason to sell to a business if they know that business can get court-ordered amnesty from having to repay them.
Lesson: Customer service matters.
How these lessons might apply to the current e-book market, I leave as an exercise for the reader.
Points the finger right where it belongs, currupt self-serving senior management who must have known among themselves from way way back that the CC "value proposition" was Ten Pounds of $hit in a Five Pound Bag.
There is no mystery as to why the No. 2 electronics retailer in the U.S., Circuit City, filed for bankruptcy on Nov. 10. You could blame it on the bad economy or decreased consumer spending — which played no small role — but the real culprit is good old-fashioned bad management.
"Circuit City was incredibly successful in the 1980s and 1990s, but they never changed after that," says David Schick, an analyst at Stifel Nicolaus. If it had adapted, it might have ended up like its chief rival, Best Buy, which in August reported both increased sales and a quarterly profit of $200 million. Instead, Circuit City reported a loss of $239 million in late September.
Circuit City became complacent — a fatal mistake in the fiercely competitive and fast-evolving retail-electronics industry. The problems began a decade ago, when Circuit City failed to secure prime real estate — its out-of-the-way locations were often just inconvenient enough to tempt customers to head to other retailers, like Wal-Mart. Then Circuit City stopped selling appliances. It didn't move as aggressively into gaming as it should have. And it missed out on big in-store promotions with thriving companies like Apple Computer. That created an opening for Best Buy, now the top electronics chain in the U.S., to surge ahead. Finally, the cherry on top: Circuit City neglected to improve its Web presence, just as online retailers like Amazon.com were hitting their stride. (See the 50 best websites of 2008.)
Another key problem for the retailer, which is based in Richmond, Va., and was founded by Samuel S. Wurtzel as a television store in 1949 (it now has about 700 outlets), was basic inventory management. "They had been unable to move their inventory," says Helen Bulwik of New Market Solutions, a retail consultancy in Oakland, Calif. That backlog left the company paralyzed, unable to buy fresh product or pay off its existing debts. Circuit City still owes $118 million to Hewlett-Packard, its largest vendor, plus $116 million to Samsung and $60 million Sony.
For many consumers, however, Circuit City's most obvious failing was its customer service. In March 2007, it announced plans to lay off its highest-paid hourly employees, including salespeople, and replace them with cheaper workers. That same year, then CEO Philip Schoonover received some $7 million in compensation. It may come as no surprise, then, that a quick Web search on "Circuit City complaints" brings up hundreds of thousands of entries.
The big question now is whether Circuit City will go out of business altogether. The New York Stock Exchange halted trading when the stock hit 10 cents a share (vs. about $25 for Best Buy) on Monday.
Read more: http://www.time.com/time/business/article/0,8599,1858079,00.html#ixzz0fAhWOTgD
How do you even show your slime-encrusted face here having pumped this sleazy garbage company all the way down from $72 the way that you did?
Say did you perhaps sell all the CC "secured creditors" a special "extended warranty" against getting ass-raped out of $2 BILLION Dollars the way that you guys did on your way out of Dodge?
If so how on earth did you slither your way out of that one?
Thanks to shorting all you worthless single-celled lying machines back there in the $60 range I really haven't needed to work for anyone at all since 2002 now, but thanks for asking.
When I find people as completely inept and dishonest as CC was at every level selling completely bogus "turnaround stories," I sure know what to do about it.
Syre we know you are not Manager, Manager254.
Why would anyone come to this board, a defunct company, 6/10ths of a cent share value let alone become so enraged.
You are so f-cking stupid there is little wonder why they fired you or that you are still unemployed, a loner and her 24/7/365.
Manager254 you little brokester why are you writing old stories about a company that doesn't exist? Nobody cares about them and less remember them as time goes by.
McCollough unlike you is enjoying the fruits of life thanks to his formal education.
See ya Manager254 you sicko.
AssClown McCollough pissing away all the CC appliance business:
"Continued strength of the consumer electronics and home office categories and the recent substantial weakness in major appliances accelerated our decision to reformat all existing superstores. The major appliance business carries high fixed costs and tends to be more cyclical than other retail categories.”
W. Alan McCollough
“I believe we have made an exciting announcement for the future of our company. It will strategically reposition our company to focus exclusively on consumer, home office and entertainment. I am convinced the time to move forward is now.”
W. Alan McCollough
(Cowboy supplied literally hundreds of posts here all about why this was supposed to be such a brilliant move at the time....)
I was out looking for my all-time favorite McCollough quote from back when the ESP and attachment rates were going right down into the sewer just after CC had summarily fired every last salesperson there who actually knew his ass from a hole in the ground. (The first time around, of course!)
Something to the effect that ESP and attachments would both certainly bounce right back up to historical levels* once all the brand new $7/Hour stooges were "properly trained in offering the add-ons?"
I guess Cowboy and the Deep Run con man who gave him the old hydraulic tonsillectomy every month were both pretty much 100 Percent WRONG about that one?
The big problem with CC after 2003 was that they were depending on minimum wage crackheads to generate all the profitability in the entire company. And CC only wanted 60 percent MORE for their ESP than what BBY was getting too.
So that's precisely why there wasn't really any CC profitability at all from that point onwards. Needless to say the forked-tongue Insiders there remembered to dump a buttload of stock every May regardless......that's how astute shortsellers knew for sure that this place was every bit as dead as Crazy Eddies.
*Bear in mind that way back in the mid-1990s when CC and BBY both had the same gross revenues, CC was cramming three times as much snake-oil ESP. And still carrying a cost of ZERO associated with the ESP as well- the SEC didn't catch up to that stunt until 1999. CC paid out 30 percent of the ESP line item in commission, booked the remainder as profit and incented their "service" managers to try and stiff as many warranty holders as they possibly could.
The whole reason that these Richmond dildoes did DIVX was because they knew themselves from as early as 1996 that such a totally fraudulent business model would never last.