Circuit City Files Chapter 11
By David Dorf on Nov 09, 2008
After announcing it would close 155 stores then laying off several hundred people at its Richmond, Virginia headquarters, Circuit City announced this morning that it has filed for Chapter 11 protection. This follows the demise of Gateway Country Stores, Good Guys, Sharper Image, CompUSA, and Tweeter.
Why are brick-and-mortar electronics retailers having such a hard time? Is Best Buy really that popular? Are Wal-Mart and Target moving into the space? No, I think part of the reason can be found at Amazon.com and the like.
I haven't been inside a Circuit City or Best Buy in a long time. I can get more unbiased information from the internet, not to mention cheaper prices, often with free shipping. Gone are the days where I need to lay my hands on a product. I can usually find enough reviews and comments to determine whether the product meets my needs. I even ordered my plasma TV from the internet (after viewing the same model at a neighbor's).
And so I think this is the end of the pure-play consumer electronics stores. Only the retailers that have diversified into appliances, overseas stores, and partnerships will have a strong store presence.
By the way, I think Circuit City has one of the best websites. I hope that baby doesn't get tossed out with the bathwater.