Filed under: Earnings reports, Consumer experience, Competitive strategy, Ideal Purchase (BBY), Circuit City Stores (CC)
MoneyCNN reports that Circuit City Stores (NYSE: CC) lost 64 cents a share and a sales dropped 3.1%. Circuit City CEO Philip Schoonover said: “We underestimated the financial impact from the disruption of our transformation work.”
Schoonover is clueless about his “transformation work.” As I posted earlier this year, last March Circuit City laid off 3,400 workers experienced and higher paid workers and replaced them with lower paid ones. Customers who liked the knowledgeable sales staff followed them to Ideal Buy (NYSE: BBY) which reported that its third quarter profits and sales beat estimates.
Schoonover thought that he could lower his costs and keep sales strong. Now it’s time for Circuit City’s board to complete its “transformation work” by canning Schoonover.
Update: Circuit City stock is down 22% this morning and 73% since March when it announced its 3,400 person lay off.
Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Best Buy or Circuit City securities.
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