What Happened To Circuit City?

One of the biggest electronics and appliance retailers in North America for years was Circuit City, a significant rival to contemporary competitors like Best Buy. However, the company has fallen from its position in the industry over the past several years. Here’s what happened to Circuit City.

What Happened To Circuit City?

The precursor to Circuit City, the Wards Company, was opened in Richmond in 1949 by Samuel Wurtzel as a retail company specializing in the sale of televisions and appliances as household TVs started to become increasingly commonplace in North America. Wurtzel’s son Alan replaced him as the company’s CEO in 1972 and changed the company’s name to Circuit City Stores formally in 1984 after starting to experiment with the rebranding in 1978. By 1988, the brand had grown so large nationwide that it had the opportunity to buy its new competitor Best Buy for $30 million but ultimately passed on the chance, believing it could eventually outperform the rival retailer without the proposed acquisition.

In the face of growing competition from Home Depot and Lowe’s, Circuit City pivoted in 2000 to focus on selling smaller electronics and home media instead of the larger appliances it had started with. Following this change, it also moved away from its sales commission pay structure to a standard hourly pay structure for its employees in 2003. Compounding this change in internal strategy, the comapny laid off approximately 3900 of its employees, feeling its experienced sales staff were overpaid and replaceable with cheaper personnel under this new pay structure.

The change in strategy failed to help the company make any long-standing headway in the market, and by 2007, it began to shut down dozens of locations nationwide in a cost-saving move. Blockbuster made a tentative offer to acquire Circuit City in 2008, but withdrew its offer in less than three months, citing current market conditions. By November of that year, Circuit City filed for bankruptcy and laid off an estimated 17% of its workforce.

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The Current State of Circuit City

Circuit City was formally liquidated on January 16, 2009, with a significant portion of its assets acquired by Systemax later that year. In the face of diminishing revenues, Systemax consolidated its assets, including acquisitions from Circuit City and CompUSA. After Systemax sold the brand in 2016 to retail mogul Ronny Shmoel, a relaunch was planned for June of that year, only to be delayed to 2018. In its new iteration and ownership, it operates as an online retailer and remains in operation at the time of this writing, selling appliances and electronics.

Though there are no currently announced plans for standalone physical locations to open, the company made a filing with the SEC in December 2023 to raise $25 million. This intended capital is for strategic partnerships for the company to embark on. Back from the dead, albeit significantly different, Circuit City lives on beyond the memories of its customers.