Retailers Who Have Failed

Articles:
Burr, Mike. “Circuit City Failed at Business by not Really Trying”. November 11, 2008
http://www.prefixmag.com/news/circuit-city-failed-at-business-by-not-really-tryi/22948/
Hamilton, Anita. TIME. “Why Circuit City Busted, While Best Buy Boomed”. November 11, 2008. http://www.time.com/time/business/article/0,8599,1858079,00.html?imw=Y
Linens ‘n Things to Liquidate After Failing to Find a Buyer. http://dealbook.blogs.nytimes.com/2008/10/14/linens-n-things-to-liquidate-after-failing-to-find-a-buyer/?pagemode=print
Every day that we listen to the news, read the paper, or merely engage in a discussion with our friends and family, the topic of the number of retailers and businesses declaring bankruptcy or shutting down their stores grows in numbers. Two of these businesses, Circuit City and Linens n’ Things, are on this ever growing list of use to be companies. Many question what caused their failure and was it merely the current economic decline that created their failure in the retail business or were there other reasons that caused them to have to shut their doors.
It appears from reading and looking at the broad picture of Circuit City, the economy was not the sole or even the main problem for this retail-electronic store’s failure. Looking over the years of management of the store and the type of products offered to the customers, Circuit City created its decline due to the lack of innovative merchandise that it was providing to the consumers. Burr states that, “The chain failed to secure better locations for their stores or move onto the web, didn’t move as aggressively into gaming as their competitors, and failed to get behind emergent electronics such as the iPod. Compounding the problem is that to increase profit margins when sales began to lag, Circuit City laid off many of its better compensated employees in favor of cheaper workers.” This definitely caused problems in the fast paced world of marketing that we now are engaged in. Hamilton stated that “Circuit City was incredibly successful in the 1980’s and 1990’s, but they never changed after that.” They “became complacent- a fatal mistake in the fiercely competitive and fast evolving retail-electronics industry.” For Circuit City, I feel that there were many inner conflicts and problems that faced them and the declining economy merely added the final blow. It’s hard to hold your head above water when there is so much pulling you down. With competitors such as Best Buy and Wal Mart, Circuit City fell behind in competitiveness and “fresh product” appeal to the updated and fast paced society of today.
In contrast to Circuit City, I feel that Linens n’ Things did fail due to the slump and downfall of our economy. The products that Linens n’ Things provided to the consumer dealt with the products that a homeowner would use in their house. Since the housing market has taken such a drop and the price of buying and furnishing a home has declined, then the demand for home furnishings would naturally drop. James Schaye, president of Hudson Capital Partners involved with the liquidation of Linens n’ Things stated that “the sharp decline in the housing market and a slump in consumer discretionary spending undermined the company’s ability to pay its suppliers. If capital markets weren’t so tight, I think this chain might possible have survived.” I agree with Mr. Schaye with the fact that the housing decline and the ability of some to get a home loan in this deep economic slump, is the type of business that is definitely suffering from this current recession. I feel sure that other home supply stores are feeling a big crunch with their sales. These include Belk, Bed, Bath, and Beyond, and other home furnishing distributors and retailers.