MoneyCNN reports that Circuit City Stores (NYSE: CC) lost 64 cents a share and a sales dropped 3.1%. Circuit City CEO Philip Schoonover said: "We underestimated the financial impact from the disruption of our transformation work."
Schoonover is clueless about his "transformation work." As I posted earlier this year, last March Circuit City laid off 3,400 workers experienced and higher paid workers and replaced them with lower paid ones. Customers who liked the knowledgeable sales staff followed them to Best Buy (NYSE: BBY) which reported that its third quarter profits and sales beat estimates.
Schoonover thought that he could lower his costs and keep sales strong. Now it's time for Circuit City's board to complete its "transformation work" by canning Schoonover.
Update: Circuit City stock is down 22% this morning and 73% since March when it announced its 3,400 person lay off.
Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Best Buy or Circuit City securities.
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Reader Comments (Page 1 of 1)
12-21-2007 @ 10:43AM
Curt Chambers said...
I am not shocked....the in-store experience at either of the locations here in Madison, WI is horrible to say the least. Just figuring out how to actually buy something is challenging.
12-21-2007 @ 2:27PM
Calicoedcat said...
CC ditched their more experienced and knowledgeable salespeople and replaced them with newbies who don't know the products, market, or their customers.
Schoonover's transformation is working. CC should stand for Clueless Corporate. For the good of the shareholders Schoonover should be SOONOVER.
12-21-2007 @ 7:45PM
Marion Polk said...
Circut City will never get my business again, since they advertise sales on items they have almost none of. I'm sure they think it is "fun" to disappoint hundreds of customers who wait in line for "specials" that don't exist, but its not a way to make any actual sales.
12-21-2007 @ 9:19PM
Joe said...
It's all about service "Dummy". We went to our CC on two (2) different occasions. 1st time couldn't get a clerk to come to the camera dept at all! We waited 20 min. then asked the check-out girl to send someone over and still nothing, so we went to BBY. 2nd time, finally gave up again after 25 min. Went to BBY again. By the way there were 3 people asking if the could help us! I have some stock in CC, you need good help quick!!!
12-21-2007 @ 3:56PM
Jim said...
My first response to the Employee Cleansing was to vow not to read another CC ad nor to visit any CC store. Schnoonover will now write a public/employee relations book for Dummies, but then I suppose he'll receive a platinum parachute.
This is a symptom of what's wrong in America.
12-22-2007 @ 4:07PM
BdoomD said...
I hear alot about how CC fired these 3400 employes. Yes a stupid move. I was a person who had to do the termination. What a tough day that was. We recently offered these employee's there job back. But everyone is right. The accountability is all misplaced on process and not performance. The uper managment lets us down every day. We do however work hard and want people to have a great experience. This next year will signal a great change in consumers minds about who CC is as a company and what they stand for.
12-22-2007 @ 7:13PM
mohamad husain said...
i think that circuitcity investors should hang on a little bit longer. the company is going threw new changes and i think it will turn out better.... p.s.this messages is regarding the c.e.o.of the company mr.phillip schoonover I have alot of new ideas for this company to grow .......
12-30-2007 @ 1:58PM
ihop116 said...
Went to the store in Ocala, Fla on a Saturday right
after x-mas and they had nobody at the registers !!!
If the CEO is clueless let him just try to shop at one of his stores !!!