Circuit City Retrenchment delaying the inevitable

NOTE: This was written and turned into Gerson Lehrman News last Friday Nov 7, and published Yesterday, before the Bankruptcy filing of this morning.

Implications:
1) Pulling out of Major markets a bad idea for long run outlook.
2) Last store remodel/refit wasn't successful
3)Tried to become like Best Buy(NYS:BBY), but didn't try to better them

Analysis:
The news the Circuit City was closing 155 stores and pulling out of major metropolitan areas came as no surprise to industry watchers.

The seeds for this were sown during the last major store remodel/refit, when the Circuit City stores were converted to essentially an imitation of Best Buy, eliminating any chance for Circuit City to differentiate itself in any way but price and advertising spend. Commission plans were eliminated from the sales floor, so the face-to-face knowledge and expertise of the customer service staff disappeared.

They never compensated for that loss of product knowledge to the consumer with the better POP informational regime that Best Buy has always employed.

Unfortunately for Circuit City, Best Buy is better at being themselves than Circuit City was at imitating them.