You Can Kiss Circuit City Goodbye

About a year and a half ago I reported that Circuit City had laid off 3,500 workers that their management had claimed were over-compensated (at a paltry $15/hr) and replaced them with cheaper labor. They offered to those workers the same job at lower wages. I predicted that their customer service was about to go from  completely unhelpful to the retail equivalent of garden gnomes.

Yet management guru's applaud the move and predicted that more companies would follow suit.

"If lower-cost labor is available, it's the right thing to do. They're not a charity," says Francie Dalton of Columbia, Md., president of Dalton Alliances, a management consultancy. "If it was your business and you have lower-cost labor available, you should do the same thing."

Six months ago I reported that their stock had since taken a nose dive.

Since that time they've lost contracts, missed out on a merger with Blockbuster, had their value go down by 87%, and have had manufacturers bail on them. Now Circuit City is about to become Circuit ghost town. That is to say, they're going under.

And I say, "Good." Any company that doesn't realize that they sell goods to people, not stock to investors, deserves to go out of business. Goodbye Circuit City and let that be a lesson to you Francie Dalton.