Monday, March 2, 2009

Financial Studies











There are different reasons for why Circuit City is going out of business. They have a strong competition such as Best Buy, who is still in business. “The company has long been an also-ran in the consumer electronics sector, consistently trailing its larger rival, Best Buy. Circuit City has faced several challenges this year, including a proxy contest mounted by an activist investor and a shakeup in its management this summer.”
From my personal experience, I would rather shop at Best Buy. I often find what I need at Best Buy, and their prices are about the same, but the store’s physical layout is just more appealing. Circuit City I have been too were dirty, dark, and the customer’s service was not great. In addition, Circuit City do not always have what you are looking for. I haven’t had issues with that from shopping at Best Buy.
According to the website, below are ten reasons for why they will go out of business:
10. If it ain’t broke, fix it anyway. During the ’90s, Circuit City was doing great. The problem was, competition was coming and it was coming hard and nobody took Best Buy seriously. If you don’t crush the competition, don’t be surprised when they crush you.
9. In a competitive environment, don’t take your eye off the ball. DIVX and CarMax were major distractions and Circuit City suffered greatly as a result.
8. In 2003, Circuit City fired thousands of employees and ended commissions for sales people in favor of an hourly structure. In 2007, Circuit City fired 3,400 of those hourly workers for cheaper replacements. When you fire well-paid veteran employees to make room for less-experienced, lower paid workers, your customers will notice. And they won’t like it.
7. Location, location, location! B locations equal B customers, B sales, B results.
6. Don’t notice too late that people want to buy movies, games and music when buying the hardware to play them. Those low margin items helped create brand loyalty for Best Buy.
5. Old, outdated stores need to be remodeled or closed and new, bigger ones need to be opened in competitive markets.
4. Selection and availability of hot products is crucial. If you don’t have what I need, Best Buy, Target or Walmart will. And next time, I will probably go there first.
3. Give customers a “real” rewards program. Not just a come-on for a branded credit card.
2. The state of “customer service” in retail America is abysmal. You can tell very quickly when you walk into a store that the employees couldn’t care less. Circuit City’s reputation for customer service was far less than stellar.
1. Filing for bankruptcy 16 days before Black Friday is an extraordinary event that no consumer can ignore. With consumer confidence non-existent and retailers fighting for every sale, you may as well just shut the chain down now.








After reading about this company, they do not have such good consumer report. “The company had mounted an expensive libel action against Consumer Reports, over the magazine's reporting on Sharper Image's signature product, the Ionic Breeze air cleaner.”
The company went under in February. From what I have read, the reasons for why they are going under is pretty clear. Not only it’s because of the faltering economy, but also they have been selling bad merchandise. For instance, the article suggests that, “The trouble began in 2003 when Consumer Reports published a report claiming the expensive Ionic Breeze air cleaners don't clean air.” The company has experienced steadily falling sales since 2004, and has reported net losses in the last three years.







I used to shop at this store when I was younger, possibly in the middle school. However, as I have gotten older I do not go in there much. I now look for accessories that will last longer. I think this is definitely one of the reasons why Claire’s business is slow. The economy is also pulling them down with it.
Other reasons for why they do not have staying power is because the goods were very poorly displayed, and even the display units were in need of repair. There were also pieces of cotton wool left all over the top of the units, and no one had attempted to clear them a way, there wasn't even a small bin available for their disposal. Having a clean store really helps. It’s safe to say that the employees don’t pay much attention to the aesthetic of the store, or the managers are not present to look over everything.

Ann Taylor
http://1stnews.org/249/ann-taylor-store-closings/




I think Ann Taylor is going out of business because just like many other retailers, they are not receiving much customers on a daily basis. Ann Taylor has announced store closings for 117 stores nationwide by January 2009. Another thing is they might be outsourcing manufacturing and labor, as well as importing materials and other products from foreign countries. Importing materials from foreign countries are very expensive, so without money coming into pay for it, they have no choice except to shut down operations.
Below are the stores that are closed or is on their way to declaring bankruptcy.




Ann Taylor -



Bryant, Fashion Bug,and Catherine’s to close 150 stores nationwide



Eddie Bauer to close stores 27 stores and more after JanuaryCache will close all stores, Talbots closing down all storesJ. Jill closing all stores, GAP closing 85 stores, Footlocker closing 140 stores more to close after January,Wickes Furniture closing down, Levitz closing down remaining stores, Bombay closing remaining stores, Zales closing down 82 stores and 105 after January. Whitehall closing all stores, Piercing , Pagoda closing all stores, Disney c, losing 98 stores and will close more after January, Home Depot closing 15 stores 1 in NJ (New Brunswick)Macys to close 9 stores after January, Linens and Things closing all stores, Movie Galley Closing all stores, Pacific Sunware closing stores, Pep Boys Closing 33 storesSprint / Nextel closing 133 storesJC Penney closing a number of stores after January, Ethan Allen closing down 12 stores, Wilson Leather closing down all stores, Sharper Image closing down all stores, K B Toys closing 356 stores, Loews to close down some stores Dillards to close some stores.






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