Wall Street

by Mike Masnick

Circuit City Buyout?

from the going-private dept

A lot of retailers have been struggling lately to figure out how to deal with online competition, and nowhere is that more obvious than in the consumer electronics space -- where deals online are often better (and with less pressure) than those in retail stores. It's not entirely clear how the various retailers should respond, but one investment firm obviously feels that being a public company makes things more difficult. Highfields Capital Management is offering $3.25 billion in cash to buy Circuit City and take the company private. While it may be true that being private will help the company respond more quickly, it's still not clear how they're going to be able to compete -- and going through a big ownership change can certainly slow a company down while it happens.

Reader Comments (rss)

(Flattened / Threaded)

  1. icon
    Justin Hollabaugh (profile), Feb 15th, 2005 @ 10:27am


    "It's not entirely clear how the various retailers should respond"
    Here's an idea... become an online retailer. Not only an online retailer but a competitive one. Find out why people like using online retailers (low pressure, low bull$*%^, readily accessible information, comparitive shopping tools, ***Low Prices!***) and tailor your web presence to their desires in a way that makes you both competitive and profitable. If the user experience is better than your rivals you will find that you can charge slightly more money simply because you offer the easiest way to purchase.
    The only logical reason any company should be driven to failure by online retailers is because they are to stubborn and/or ignorant to change with the times.

    reply to this | link to this | view in thread ]

  2. identicon
    dorpus, Feb 15th, 2005 @ 11:28am

    Are big-ticket electronic items dinosaurs?

    The two most obvious big-ticket electronics items are TV's and stereo systems. As for TV's, the internet is eroding TV viewership. As for stereos, as the population gets older, they will tend to spend less on big stereo systems -- how many old people have to have a top-of-the-line stereo, when they can't hear a damn thing anyway? The generation that grew up on loud music will be deafer than ever. Who needs to buy big, expensive electronic stuff anymore? Everything is becoming smaller and cheaper.

    reply to this | link to this | view in thread ]

  3. identicon
    Anonymous Coward, Feb 15th, 2005 @ 1:00pm

    Re: Are big-ticket electronic items dinosaurs?

    ... including your thought processes dorpus.

    reply to this | link to this | view in thread ]

  4. identicon
    Old Timer, Feb 27th, 2005 @ 3:39pm

    Re: Are big-ticket electronic items dinosaurs?

    Buying TV's online has a few huge disadvantages. 1. Plasma TV's are VERY expensive to ship because they are very succeptable to damage. Also, unless it is a trusted authorized dealership, most tv's company if their tv's are bought online will void the warranty... Sony only gives their aproval to 2 percent of the companies who ask for it. And as for big stereo purchases; you obviously have no clue what you are talking about, I have sold home stereo system for years now, and I happen to know that high school students and younger go for the piece of crap shelf systems, college students go for 100-300 dollar piece of crap surround sounds or Home Theatre in a Box units. Where as my biggest and best customer base is from the ages of 35-55, people who want the top of the line stereo equipment, stuff that plays their favorite music better than they've ever heard it (and they were there when it was payed at woodstock, it's takes them back in style) Or they are the movie watchers, with families that hate the sticky pop filled, popcorn aroma, movie theatres and wait for the movie to come out on DVD because with thier new big screen and bad-ass sound system, it looks and sounds better anyways, without the little shithead behind them kicking their chair, and the teenagers commenting on line of the movie.

    So educate yourself or shut it.

    reply to this | link to this | view in thread ]

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