Circuit City Seeks Unified Price15 Oct, 2008 By: Erik Gruenwedel
Fiscally challenged Circuit City Stores Oct. 15 said it would offer consumers through the holidays the identical price on items purchased in-store, online or by phone.
Richmond, Va.-based Circuit City has often marketed less-expensive price points for consumer electronics items purchased online. When third-party research found that 51% of respondents said they trusted retailers that offered identical price points online and in-stores, management decided to act.
“We believe that promising price consistency across sales channels not only is the right and logical next step in retail evolution, more importantly, it shows our customers they will be treated fairly and with respect,” said James Marcum, vice chairman and acting president and CEO.
Circuit City is facing a barrage of challenges that include a weakening economy, gloomy forecasts for the entire retail landscape and unsuccessful internal efforts to restructure the company and return it to profitability.
The No. 2 consumer electronics chain lost more than $239 million in the most recent quarter and has been profitable just one quarter since fiscal 2007. It recently embarked upon a comprehensive review of its entire operation, which included replacing CEO Philip Schoonover with Marcum.
Some analysts now question whether Circuit City can survive past the fourth quarter — victim of too many poorly located stores, depleted cash reserves and the inability to secure additional credit in the current economic climate.
Response on Wall Street would appear to buttress cynics as shares fell more than 7% to close at 37 cents per share.
On the flipside, rival Best Buy Co. said it expects to double annual revenues to $80 billion in the next five years, largely through judicious overseas expansion.
In an investor presentation Oct. 14, Robert Willett, CEO of the Minneapolis-based chain’s international operations, said Best Buy would open 100 stores in Europe and Mexico, including six new stores in China by the end of the year.
Willett said the chain had done its homework studying foreign markets, which included acquiring a British-based mobile phone company in June.
"We're actually deliberately late to the international game," Willett said.