Wards Company Case Study

In 1949, Samuel S. Wurtzel opened the United States’ first electronic superstore by the name of Wards Company. Located in Richmond, Virginia, Wards Company sold television sets from one location; however by 1959, Wards had four satellite stores with sales totaling one million per year. By 1965, along with televisions, home appliances were added to the company’s inventory. (Hart) Unfortunately in 1970, just five short years after their retail expansion, Wards Company faced the bankruptcy but with new management and store consolidations, the company was able to overcome that obstacle and continue on. (Hart) After the company’s near miss, Wards made a few changes to their business strategy bringing along much success. Due to their decision

(Hart) What he envisioned was not playing out like he wanted. With more available floor space, McCollough intended to remodel 140 stores, but was forced to decrease to 20 to 25 stores instead. The time and effort it would have taken to renovate 140 stores would cost the company $1 million dollar per store and this was not a price the company was able to pay. Unlike in the 90s, by 2003, the company was not profiting and the sales reduced so to save money, Circuit City set out to lay off 3,900 commissioned workers, which accounted for 60% of the company’s sales associates. (Hart) These employees would be rehired, but paid on hourly wages. The decision to cut commissions caused the company to lose lots of experienced workers. In 2007, leadership searched for more ways to cute the company costs and this time the approach Philip Schoonover took was to terminate 3,400 employees. Schoonover, who was appointed as the executive vice president and chief merchandising officer of Circuit City in 2004, was also the executive vice president of Best Buy. (Hart) Even though his tactics helped Best Buy succeed, it did not do the same for Circuit City. His suggestion to fire employees to save money did not sit well with many especially since money was spent awarding top executives

Even though they had competitors, the extra 20% of floor selling space only made them spend money on extra electronics that turned into backflow that could not be sold back and disabled them from purchasing newer items. Unlike other competitors, Circuit City did not utilize the tools available to promote their products, tools such as a web pages and/or social media. Another move I considered a “bad move” was stopping commissions. When they laid off commission worked and rehired them as hourly paid worked, I think that hurt the morale of the company. The company would have probably benefited from cross training the workers and have them qualified in other work