Circuit City Stores (NYSE: CC) filed for bankruptcy. It was only a matter of time as the clock started ticking in March 2007. The CEO who sent Circuit City into its doom loop got fired in September. Today, its new CEO James Marcum, "leveraged its history" into bankruptcy.

I first posted about Circuit City's egregious mis-management here. The problem was that its former CEO, Philip Schoonver, had the brilliant idea of cutting costs by firing its 3,400 top people. The people he fired happened to be the ones who knew what they were talking about when it came to electronics and those sales people went to work for the competition, taking their customers with them. The result for Circuit City was a plunge in sales and bigger losses. And Circuit City's board took way too long to realize the error of its ways.

Now shoppers looking for holiday bargains can go into the Circuit City stores and try to get deals. The fate of Circuit City will serve as an important lesson for any manager: There's a smart way to cut costs and a dumb way. The dumb way is to fire the experienced sales and service people who keep your customers coming in the door. The smart way is to figure out which parts of your company are not adding value to customers and eliminate them.

Schoonover chose the dumb way and he bankrupted the company.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Circuit City securities.

Why Circuit City was electrocuted originally appeared on BloggingStocks on Mon, 10 Nov 2008 09:40:00 EST. Please see our terms for use of feeds.

Even if the national headlines weren't already providing enough focus on the economy, plenty of economic data is due out as the month and the quarter wind down. U.S. economic data scheduled to be released this week include:

• Personal income (Aug. 2008): Monday 8:30 AM
• Consumer confidence index (Sept, 2008): Tuesday 10:00 AM
• Challenger job cut announcement (Sept, 2008): Wednesday 7:30 AM
• ISM manufacturing survey (Sept. 2008): Wednesday 10:00 AM
• Construction spending (Aug. 2008): Wednesday 10:00 AM
• New motor vehicle sales (Sept. 2008): Wednesday 4:00 PM
• Monster employment index (Sept. 2008): Thursday 6:00 AM
• Factory orders (Aug. 2008): Thursday 10:00 AM
• Employment situation (Sept. 2008): Friday 8:30 AM
• ISM nonmanufacturing survey (Sept. 2008): Friday 10:00 AM

Other economic events scheduled for this week include:

• Fed's Hoenig speaks on "The Economy and Monetary Policy": Monday 9:45 PM
• Fed's Lockhart speaks on the economic outlook: Tuesday 1:00 PM
• Ford Motor Co. September 2008 Sales Conference Call: Wednesday 1:00 PM
• AMETEK Inc. at Oppenheimer Industrials Conference: Thursday 8:00 AM
• DuPont at Citigroup Ethanol on the Cob Conference: Thursday 12:50 PM
• Fed's Evans speaks at Agricultural Markets and Food Price Inflation conference: Thursday 1:00 PM
• Fed's Bullard speaks at Indiana University Department of Economics: Thursday 7:00 PM
• Fed's Hoenig speaks on "The Economy and Monetary Policy": Thursday 9:45 PM
• National Association for Business Economics 50th Annual Meeting to address Future Economic Challenges: Friday 9:00 PM

Continue reading The week in preview: End-of-quarter expectations

The week in preview: End-of-quarter expectations originally appeared on BloggingStocks on Sun, 28 Sep 2008 12:30:00 EST. Please see our terms for use of feeds.

The quarter is winding down, and here are some highlights from this past week's earnings coverage from BloggingStocks:

• Air Products & Chemicals Inc. (NYSE: APD) lowered its guidance for the current quarter.
• AutoZone Inc. (NYSE: AZO) missed Q4 earnings estimates despite a modest increase in profits.
• Bed Bath & Beyond Inc. (NASDAQ: BBBY) reported disappointing Q2 results that met analysts' expectations.
• Chevron Corp. (NYSE: CVX) faces earnings declines if the Paulson plan fails, says Jim Cramer
• Circuit City Stores Inc. (NYSE: CC) earnings declines finally led to the ouster of CEO Schoonover.
• Discover Financial Services (NYSE: DFS) beat Q3 expectations despite charges and reserves.
• General Electric Co. (NYSE: GE) lowered its Q3 and full-year forecast due to financial sector woes.
• KB Home (NYSE: KBH) reported a greater-than-expected loss for Q3, and yet shares rose.
• Lennar Corp. (NYSE: LEN) posted significantly smaller Q3 losses on cost cutting.
• McCormick & Co. Inc. (NYSE: MKC) topped Q3 expectations due to the sale of a brand.
• Nike Inc. (NYSE: NKE) posted better-than-expected Q1 results despite a decline in net income.
• Research in Motion Ltd. (NASDAQ: RIMM) posted strong Q2 results accompanied by a weak forecast.
• Rite Aid Corp. (NYSE: RAD) Q2 net loss more than doubled and revenues were flat
• Secure Computing Corp. (NASDAQ: SCUR) missing estimates didn't stop a deal with McAfee (NYSE: MFE).
• 3Com Corp. (NASDAQ: COMS) Q1 results topped both analysts estimates and previous guidance.
• 3M Co. (NYSE: MMM) faces significant earnings declines if the Paulson plan fails, says Jim Cramer.

Also, are analysts' expectations for the the coming year too optimistic?

Upcoming quarterly reports include Circuit City (NYSE: CC), Walgreen (NYSE: WAG), Pepsi Bottling Group (NYSE: PBG), Constellation Brands (NYSE: STZ), Marriott International (NYSE: MAR), Family Dollar Stores (NYSE: FDO).

Visit AOL Money & Finance for more earnings coverage.

Earnings highlights: Nike, Research in Motion, Lennar, GE and others originally appeared on BloggingStocks on Sat, 27 Sep 2008 14:40:00 EST. Please see our terms for use of feeds.

Circuit City Stores Inc (NYSE: CC) waited until its CEO had destroyed 91% of its shareholder value before dumping Phil Schoonover. The Washington Post reports he made $6.5 million last year and there is no word on his severance package -- I wonder why. As I posted 18 months ago, Schoonover had a hair-brained scheme to save costs by firing his top 3,400 sales people. They took their customers to the competition and Circuit City's revenues and profits tumbled. Since that day in late March 2007, Schoonover's less than bright strategy helped take its stock from $18.53 to $1.70.

Schoonover's management move proved to be an excellent case study in what not to do. One of the most fundamental management concepts is that if you have good employees and treat them well, they will provide better service to your customers. And the happy customers will keep coming back. Conversely, if you treat employees badly, they will treat customers with contempt and you'll have to spend lots of money on marketing to bring in new customers who will just up and leave after their first unpleasant experience.

In January I received an unsubstantiated -- and ultimately false -- rumor that Schoonover was about to be replaced. What is so striking to me is that Schoonover got paid to make such an unprofitable move and then stuck around so long to oversee the resulting damage. Circuit City's new CEO, James Marcum, told BusinessWeek: "We believe that by fine-tuning our focus and strategies we will be able to leverage this history and build a stronger future for the company."

We'll see how well "leveraging this history" will work.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Circuit City securities.

Circuit City electrocutes CEO originally appeared on BloggingStocks on Tue, 23 Sep 2008 10:15:00 EST. Please see our terms for use of feeds.

Based on the company's performance, the head of Circuit City (NYSE: CC) should have left a year ago. Instead, he left yesterday and it will not help the retailer one little bit.

According to The Wall Street Journal, the company's board forced out Philip J. Schoonover, who served as chairman, president and chief executive officer. He had been around for four years and during that time, earnings had gotten worse. Perhaps that was not his fault.

Circuit City may simply be too small to compete with operations like Best Buy (NYSE: BBY) and Wal-Mart (NYSE: WMT). It does not have their number of stores or their balance sheets to readily add new locations.

Circuit City tried to find a buyer but had no luck. That is hardly Schoonover's fault. No one wants a third-tier electronics retailer that is losing money. The company's shares are at $1.70, down from a 52-week high of $9.65. If Circuit City cannot find at buyer at that price, it is not going to be sold.

CC can put a chimp or the Queen of England into the top job; it will not matter. The company is beyond saving. Call the Chapter 11 lawyers.

Douglas A. McIntyre is an editor at 247wallst.com.

The head of Circuit City finally leaves originally appeared on BloggingStocks on Tue, 23 Sep 2008 08:28:00 EST. Please see our terms for use of feeds.

Circuit City's fired workers taking sales out the door? originally appeared on BloggingStocks on Fri, 22 Jun 2007 17:45:00 EST. Please see our terms for use of feeds.