Circuit City (CC) has now regressed into the guy in high school that dumps his girlfriend only to beg her to come back after he realizes what a huge mistake he made.
Circuit City Spokesman Bill Cimino said last week that Circuit City invited former U.S. workers to apply for jobs, a practice he said was not uncommon in retail, given the typically high turnover. It should be noted here that many of these folks are that same ones that in March, Circuit City let go. More than 3,000 workers were fired and replaced them with lower-paid staff. Cimino added that Circuit City would likely invite more ex-staffers to return next year.
"In a lot of cases, we've completely changed how our stores operate; the roles of our associates within the stores," Cimino told Reuters. "We've got a better career path now for associates." By career path do you mean you will not fired them unexpectedly?
Now, what does Circuit City really hope to accomplish? The good one they let go because the were "too expensive" will already have jobs and those who are still unemployed 6 months after they were let go, do they really want them back? The timing of this is terrible too. They now have themselves competing with the holiday hiring spree that happens every years in retailing.
This is just another in a long line of management failures that has shares snuggled comfortably at 4 year lows. There has been a lot of talk in the blogsphere about shares being a bargain and by most mathematical metrics, they are. Big problem though. In order for those metrics to translate into a retail turnaround and thus have shareholders reap the benefits of that value, management needs to do its job.
Circuit City could carve itself out a niche among the monsters out there like Best Buy (BBY) and Wal-Mart (WMT) much like Julian Day at RadioShack (RSH) has done. It would need to be done on service and a more professional shopping experience. Getting rid of the best folks you have to do that based on their pay scale was just inexplicably short-sighted.
If current management has shown anything, they are just not up to the job and until new management is there, Circuit City will continue to be a value-trap for investors that if it is not bought out soon (next 8 months), will most likely be driven into bankruptcy a sentiment I first expressed in June.
On a side note, why haven't any of these electronics retailers with "help desks" inside like City's "Firedog" or Best Buy's "Geek Squad" jumped at the chance to associate somehow with the hit show "Chuck"? It is a natural association.