page_title: Circuit City
section_title: 2000s
hierarchical_section_title: Circuit City / History / 2000s
caption_attribution_description: English: Circuit City "The City" signage, going out of business sale, Torrington, CT
context_page_description: Circuit City Corporation is an American consumer electronics retail company, established by Ronny Shmoel in 2016 as part of his acquisition of the brand name and trademark rights sold by Systemax, which formerly operated the CircuitCity.com website from 2009 until 2012, when it was consolidated into the TigerDirect brand.
  Founded in 1949 by Samuel Wurtzel as the Wards Company, the original company operated stores across the United States and pioneered the electronics superstore format in the 1970s. After multiple purchases and a successful run on the NYSE, it changed its name to Circuit City Stores Inc.
context_section_description: By 2000, many Circuit City stores were out of date and in bad locations, unable to compete with newer Best Buy stores. In 2000, Circuit City abandoned the large appliance business and introduced a more self-serve "Big Box" format called "Horizon". This was controversial because in the previous year Circuit City was the second largest appliance retailer in the United States, behind only Sears. The company had earned nearly US$1.6 billion in sales revenue from large appliances in 1999. However, executives were concerned about the competition from Home Depot and Lowe's and believed there would be big savings in warehouse storage and delivery costs if they quit the large appliance business. It was later realized that Circuit City thus missed out on the residential housing boom of the mid-2000s, which saw a dramatic rise in new-appliance sales.
  Every Superstore was retrofitted after the exit from the large-appliance business, using the space for an expanded self-serve computer accessory and software selection. Stores at the time sold only PlayStation games under an exclusive agreement with Sony. The new space allowed them to sell Nintendo, Sega, and eventually Xbox games after the agreement ended. Music and movie sales had been added to most stores years before, but the extra space allowed the selection to be added to smaller stores. The retrofitting project alone cost the company US$1.5 billion.
  In 2003, Circuit City converted to a single hourly pay structure in all stores, eliminating commissioned sales. Many previously commissioned sales associates were offered new positions as hourly "product specialists", while 3,900 salespeople were laid off, saving the company about $130 million per year. Many company insiders later revealed that they thought this was the most influential company decision that would ultimately lead to its demise.
  In 2004, with the expansion of the wireless phone market, Circuit City partnered with Verizon Wireless to include full-service Verizon Wireless sales and service centers in each Superstore. These locations were owned and staffed by Verizon Wireless. Circuit City stopped selling wireless phones with all other carriers due to the agreement.
  In April 2004, Circuit City announced its purchase of Canadian retailer InterTAN. Circuit City paid approximately US$284 million for InterTAN's 980 stores, which operated in Canada under the trade names RadioShack, Rogers Plus, and Battery Plus. Chairman and CEO Alan McCollough believed these existing small-format stores provided an easy entry into Canada, a country where Best Buy had been expanding. RadioShack sued InterTan in April 2004 over the branding use of RadioShack in Canada. Circuit City lost the lawsuit and all Canadian locations were renamed The Source by Circuit City in 2005. These stores were sold to Bell Canada and continue to operate.
  In 2007, a new 20,000-square-foot (1,900 m²) store format was introduced as "The City" and designed to eliminate previously under-utilized space. The smaller format gave the company greater flexibility to enter new markets and backfill existing ones. Most new store openings in 2008 used this new store format.
  On February 8, 2007, Circuit City announced that it planned to close seven domestic Superstores and a Kentucky distribution center to cut costs and improve its financial performance. News reports also mention that 62 stores in Canada were to close.
  Circuit City announced on February 23, 2007 that its Chief Financial Officer, Michael Foss, would leave the company. This unsettled investors and analysts concerned about management turnover. "This represents the third departure of a senior executive in the past six months, and the second departure of a top-five executive in the past month" said Goldman Sachs analyst Matthew Fassler in a client note. Chief Executive Officer Phil Schoonover's "hand-picked team is turning over faster than we would like to see in a turnaround situation."
  In 2007, the starting wage for new employees was dropped from $8.75 an hour down to $7.40 an hour ($6.55 being the federal minimum 
caption: Circuit City's most recent store format nicknamed "The City", used from 2008 to 2009. Note the effects of a liquidation sale (including a "store closing sale" banner on the left) occurring on March 7, 2009 at Torrington, Connecticut.
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