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Why Circuit City Went Out Of Business

1071 Words5 Pages

Circuit City Circuit city was established in 1949 and was originally called the ward company. The founder of this company was Samuel Wurtzel. Circuit city was an American multinational consumer electronics store that competed with other electronic stores like best buy, and fry's electronics. Their were about 567 stores across nationwide. The company's slogan was " where the streets were paved with bargains". Some of the locations of the circuit city's were acquired by another company going bankrupt. Circuit city went out of business in 2009 following an online only format which led to the company ending in 2012 followed by bankruptcy.The 3 main reasons circuit city went out of business is because of bankruptcy, liquidation, and not be innovative. …show more content…

Bankruptcy is basically when you can't really pay anything because your business is failing so you have to file for bankruptcy, which a court will approve. Circuit city couldn’t really do anything because they weren't meeting sale margins and continued to not advance or even try to be innovative which is one of their downfalls and they owed 4898 Million. They had to file for bankruptcy which protects the company from paying debts depending on what kind of bankruptcy they file under. Circuit city used Chapter 7 bankruptcy, which uses liquidation. The company later, after filing for bankruptcy chapter 7 had to use liquidation, which is the process of selling all assets in order to pay off their debts. Many assets had to be payed off considering how much circuit city owed. Circuit city basically sold all their property's which is honestly a vast amount considering they owned about 567 stores nationwide. The good part is that they were protected by the federal court because they still owed money to many people. Lastly they weren't very innovative. Circuit city wasn’t very …show more content…

Some times the employees would just take your item and say they couldn’t find it. They should at least give the stuff back to the person who lost it not keep it. I would hire or try to hire people who are honest and can make people feel confident along with giving back their items and apologizing. Another thing I would change is probably how they bought many buildings. They bought so many buildings and still owed money while buying each building. I would of waited until we were able to afford another location even if it took a couple of years because being profitable is better than being in debt. I honestly don’t know why they did this, but it was a dumb mistake on circuit city's behalf. Some other problems that concern me about the circuit city where its locations. Many of the locations were in bad areas or close to competitors like best buy and circuit city couldn’t really keep up with them. Circuit city also just had bad business ideas or predictions because circuit city used to be in the appliance business, but later switched to a horizon format which allows customers to browse ales instead of being able to search the floor more

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