Until the beginning of 2009, Circuit City was North America's second-largest specialty retailer of consumer electronics products. In the US, it operated a national chain of around 570 large-format superstores, selling a wide range of video and audio devices, computers and home office hardware, as well as entertainment software, CDs and DVDs. However, the group had struggled for some time to maintain profitability in the face of intense competition from leading speciality electronics retailer Best Buy, as well as general retailers such as Wal-Mart. Circuit City eventually filed for bankruptcy protection in November 2008. However no buyer could be found for the business, with the result that it was forced to announce the closure of its remaining US stores in January 2009 at a cost of around 34,000 jobs. They shut their doors for the last time in March after a liquidation sale.
The Circuit City name was acquired by retail group Systemax and relaunched as a web-only reseller, alongside several other brands. However, three years later that site (along with another brand rescued from bankruptcy, CompUSA) was shuttered and folded into Systemax's main online retail channel TigerDirect.com. The Circuit City banner was later sold to entrepreneur Ronny Shmoel, who announced plans to relaunch the business in 2018.
Circuit City's operations in Canada, comprising around 765 smaller stores trading as The Source by Circuit City, were the subject of a separate bankruptcy filing and remained open. They were acquired in 2009 by telecoms group BCE, and now operate as The Source.
Circuit City was founded in Richmond, Virginia in 1949 by Samuel Wurtzel as that city's first retailer of televisions and other household appliances. It expanded through acquisition, operating under a variety of different names until the Circuit City brand was introduced in the 1970s. Run by the Wurtzel family until the mid-1980s, the business gradually came to specialize in electronics, and sold off or closed its other chains. During the 1990s, the group diversified into financial services as well as secondhand car sales (with the CarMax chain), but these businesses proved a major distraction from the core business of electronics, and were later sold.
In 2004, Circuit City moved outside the US for the first time, acquiring Canadian group InterTAN for $260m. The latter operated a chain of more than 800 mainly smaller outlets, selling private label and brand name consumer electronics products in Canada. Until its purchase, InterTAN was the Canadian licensee for Radioshack, the US #3 electronics retailer. However, following its acquisition by Circuit City, it was forced to rebrand all outlets, becoming The Source by Circuit City. The group also ran Canadian mobile phone retailer Rogers Plus on behalf on Rogers Wireless, but that relationship was terminated at the end of 2006. A new technical support service, Firedog, launched in the US 2006 to help customers with computer and home entertainment installations.
Under intense pressure from Best Buy and others, Circuit City attempted to cut costs in 2007 by firing more than 3,000 higher-paid (and also more experienced) employees. However, that ill-considered move only made the group's problems more serious, because of the resulting deterioration in customer service. Revenues for the year ending February 2008 fell 6% to $11.7bn, generating a net loss of more than $321m.
In Spring 2008, Circuit City became the target of a $1bn takeover bid from video rental chain Blockbuster. It dithered over whether or not to accept the deal, and before it could make a decision Blockbuster pulled out of talks in July, citing the decline in economic conditions. That announcement caused Circuit City's share price to fall to its lowest level in more than 20 years. Later the same year, Philip Schoonover resigned as president & CEO and was replaced by James Marcum. Allen King was named as non-executive chairman. All executives left the business following its bankruptcy.
Last full revision 17th January 2018
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