Very rarely do you witness analysts asking the CEO to throw in the towel, sell the company, and step down in the quarterly conference call. At Circuit City this is becoming a regular routine.
While sales at nearest competitor Best Buy rose, Circuit City’s sales slipped 3 percent to $2.96 billion from $3.06 billion a year earlier, with sales at stores open at least a year (a closely watched retail metric) falling 5.6 percent. The financial performance did not fare well either despite cutting all those “highly-paid” associates in stores, “losses ballooned to $207.3 million, or $1.26 per share, from $20.4 million, or 12 cents per share, a year ago”.
The management team lead by CEO Philip Schoonover maintains the company is on the right track and said, "We're staying the course on our longer-term strategic initiatives." It appears the master strategy is to turn on the jets and dive towards bankruptcy.
In a further absurdity, Circuit City announced the approval of millions in cash incentives to retain its executives. These are the same executives that canned all the top performers in stores earlier in 2007 and then watched the stock drop 70% since.
“The bonuses didn't sit well with Merrill Lynch analyst Danielle Fox, who questioned whether Circuit City should be focusing on incentives for the people who sell its products in stores.”
It appears to be time to officially place Circuit City on the “death watch” list. Shortly they can join CompUSA in shuttering all the stores and auctioning the remaining inventory.
Circuit City Posts Huge 3Q Loss
Circuit City Posts Wider-Than-Expected 3rd-Quarter Loss, Shares Tumble
http://biz.yahoo.com/ap/071221/earns_circuit_city.html
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