Essay About Fall Of Circuit City Stores And Pic

The Fall of Circuit City Stores, Inc.
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[pic 1][pic 2][pic 3]THE FALL OF CIRCUIT CITY STORES, Inc.CASE SYNOPSIS:Circuit City, the leader in consumer electronics retailing for over 20 years was forced into liquidation. At last it has to liquidate its remaining 567 U.S. stores.Circuit City Superstores were between 30,000 & 40,000 sq. feet in size and carried consumer electronics & appliances, each store having 50% space devoted to selling space and rest for storing.Best Buy is the main competitor of Circuit City.The Circuit city business peaked in the year 2000, with sales 17% higher & operating profits up 86% for an all-time high of $541 million.But there is a collapse running in the background since the advent of Best buy which has been slow and painful, though it saw few reprieves in the middle.CASE PROBLEM:Why did Circuit City fall so painfully?CASE ANALYSIS:HISTORY:In 1949, Samuel S. Wurtzel took the advantage of opportunity of first TV station going on air & rented 1,200 sq. feet of store in Richmond, Virginia.Made public offerings in 1961 and started expansions in 1970.Loading dock proved successful and added 7 more units in 1981 and changed the name to Circuit City Superstores.It grew rapidly reaching 96 superstores and 23 regular stores by 1989PRODUCTS and SERVICES in CIRCUIT CITY:TV & Home entertainmentMP3 & Audio devicesCameras & CamcordersComputersMoviesPhonesFiredog(Repair and Installation)Competitors:Best BuyWal-MartRadioShackHome DepotFINANCIAL ANALYSIS:Trading and P&L account of circuit city Fiscal year 1999200020012002200320042005200620072008Comparartive Statement of year 1999 & 2008sales(in mlns)$9,338$10,599$10,458$9,590$10,016$9,778$10,478$11,598$12,430$11,74420.49%operating profit(in mlns)$291$541$323$237$60-$6$87$211$122-$349183.38%Gross profit25.00%26.00%25.30%25.80%25.70%25.10%26.00%25.80%25.00%22.30%-12.11%selling & admin exp21.20%19.60%21.00%21.90%23.50%23.20%23.70%22.60%22.60%23.60%10.17%operating profit(%sales)3.10%5.10%3.10%2.50%0.60%-0.10%0.80%1.80%1.00%-0.30% Net income mlns)$148$197$149$191$106-$89$62$140-$8-$320146.25%Common size statement3.12%5.10%3.09%2.47%0.60%-0.06%0.83%1.82%0.98%-2.97% 1.58%1.86%1.42%1.99%1.06%-0.91%0.59%1.21%-0.06%-2.72% Balance sheet  Cash2486344371248885783100583873929716.50%Inventory129214061411123414101517146016981637157417.92%current asstes205325172354307531032919268628332844244015.86%current liabilities88212101066141812801177126416221714160645.08%total assets313535373453413337993633378940694007374616.31%longterm debt2871283314112312525057-403.51%Equity1825205522572560234222242087195517911503-21.42%common size statement7.91%17.92%12.66%30.20%23.30%21.55%26.52%20.59%18.44%7.93% 65.49%71.16%68.17%74.40%81.68%80.35%70.89%69.62%70.98%65.14% 28.13%34.21%30.87%34.31%33.69%32.40%33.36%39.86%42.78%42.87% 9.15%3.62%0.96%0.34%0.29%0.63%0.32%1.28%1.25%1.52%