Monday, January 19, 2009

Circuit City Goes Under

Circuit City, the electronics superstore, has finally declared that it is going out of business. I say finally, because the signs have been pretty obvious for a number of years. A year-and-a-half ago, Circuit City laid off a number of its higher-paid employees only to offer them their jobs back at very reduced pay. The problem with that practice was trifold: it devalued the worker, it prevented the worker from finding similar employment at similar pay, and, because the company offered the job back, it prevented the employees from collecting unemployment.

Circuit City's main problem was that it thought it was bigger than it was. It tried to compete with Best Buy, a company far larger and with more buying power than it, meaning Best Buy could offer lower prices. Circuit City should have diversified, offered cutting-edge technology, and offered better customer service, the strengths of a smaller business. They played their cards wrong and now they're out of the game. And I am not sorry to see them go. A company that won't treat its workers with respect, and one that cannot learn to adapt, does not deserve to stay in business.

This economy, while tough on everyone, will bring with it some good aspects: it will clear out businesses that can't adapt or compete, it will cause people to take stock of what they already have and what they really need, and it will bring about a shift in business away from bottom-line only thinking to adaptation and catering to families. These are good things. Recessions are not all bad, they just tend to be rather uncomfortable. It is also a very good thing to have an adjusted market to keep inflation under control. While I hope the recession will be over sooner rather than later, I am glad to see some greedy, over-reaching, soul-killing companies go out of business. Thus I bid Circuit City a very fond fare-well.

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