Wednesday, November 21, 2007

Retro: The Dumbest Retail Business Move of 2007

In what many have labeled the dumbest business move of 2007; Circuit City fired more then 3000 high paid workers in March and replaced them with lower-paid staff.

Fast forward the clock to eight months later and Circuit City is begging these former employees to come back. Circuit City has tried to improve its employee image; pushing the concepts of career path, better work environment, improving morale, and superior pay. For the most part most of the former employees are not buying any of it and have told the retailer to get lost.

Most analysts view that Circuit City was on the exact wrong track and the recent changes will not improve the situation. The survival of the company is in doubt unless a strategic partner gets involved; but no outside investors have been willing to step up to the plate to get involved with this dismal retailer.

Circuit City asks ex-workers to return

Just remember the two golden rules for struggling retailers:
1) Shut down underperforming locations if you must scale back.
2) Make sure that you keep experienced, higher paid staff in place.

Circuit City managed to ignore both of these rules, and both eliminated and infuriated the top portion of its workforce in the process. Some retailers don’t deserve to survive, and according to most analysts this may be one of them.

Sometimes the one year chart says it all: