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Will the third time be a charm or last strike for Circuit City?

February 2, 2016Written by George Anderson

Circuit City, Denton, TX, circa 2007 (Photo: Wikimedia, Jonesdr77)

Some hear the name Circuit City and think iconic retailer. Others hear the name and failed retailer comes to mind. Regardless of one's recollection, there is no denying the consumer electronics brand is not likely to get another chance at retail success should it fail this, its third time around. (The first was as a the number one chain of consumer electronics stores that fell into bankruptcy; then as an e-tail entity owned by Systemax.) According to reports, the Circuit City name is being revived by Ronny Shmoel and Albert Liniado, a couple of retail veterans from the New York metro area. The first store opening is planned in June (Dallas has been identified as potential site) along with the new circuitcity.com. Unlike the big box stores that Circuit City used to operate, the new version will be in the 2,000- to 4,000-square-foot range. In an interview with TWICE, Mr. Liniado said the retailer would focus on profitability. Besides keeping overhead low with small footprint stores, the company planned to use private label to boost margins along with using minimum advertised pricing (MAP) and a unilateral pricing policy (UPP) for branded goods. Stores will be staffed with associates working on a salary plus commission basis. The goal is to have between 50 and 100 company-owned stores operating by the end of 2017. The company also foresees up to 200 more locations eventually being opened under franchise agreements. Circuit City plans to appeal to Millennials with an emphasis on service in its stores. The product selection will include smartphones, tablets, notebooks, gaming products, headphones, drones and 3-D printers. Touchscreens will be located in-store to give shoppers access to as many as one million SKUs online. Early descriptions of the company's plans for its stores has led some to question whether it will be similar to RadioShack. Circuit City's CEO, Mr. Schmoel, dismisses the comparison. He told TWICE that the new Circuit City is "going to be all about connectivity." Anthony Chukumba, an analyst with BB&T Market Capital, is not optimistic about Circuit City's prospects. "The last kind of small store consumer electronics retailer of any substance was RadioShack, and they just went bankrupt," Mr. Chukumba told Minnesota Public Radio. "So, we might want to chalk this up to the triumph of optimism over experience."

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