After losing $320 million last fiscal year, and filing Chapter 11, Circuit City is closing 155+ stores in a last ditch effort to survive. Will it be enough? Doubtful.

It is very unfortunate that some companies have been unable to change and keep-up in today’s ever changing marketplace, and Circuit City is a prime example.  Once a leader in the consumer electronics market they have recently fallen well behind their closest competitor, Best Buy.  Today, citing concerns about their future, Circuit City files for Chapter 11 bankruptcy protection, which, in theory, would allow them to coninue operations through the peak holiday season.

What’s not written out in their filing are the changes that they’re going to make that might enable their future success.  The company does not appear ready to change, and without a much needed 180 degrees change from what they’re doing today it’s unlikely that they will last through the holiday season, let alone through 200.  So here’s the burn…

Circuit City would have you believe that they are going to come out of this bankruptcy protection in early 2009 – as though this holiday season alone will save them.  The reality is quite a bit more complex, because it’s already obvious everywhere you look that this holiday season is going to be quite dark.  The consumer is done spending the big dollars for a while and that’s going to seriously impact merchants like Circuit City.  What’s worse is that Circuit City doesn’t have the reputation that it used to, which means that just having a local store may not be enough any more.

That’s right – I said it – Circuit City has a very poor reputation and these days its quite deserved.  The quality of service that you get from Circuit City is far below even the worst retail merchants out there and even the managers seem apathetic to their customers and employees.  Why would any consumer choose that over what they can get from Costco, Best Buy or even Sears?  They wouldn’t and in recent years Circuit CIty has paid the price.

My belief – it’s only a matter of time, so avoid those extended warranties and be very careful what you hope for if you need long-term service on any product you buy.

Ranter