Circuit City looks to better 'customer experience' after another loss

The struggling consumer electronics retail chain today blamed its continuing financial losses on a 'weakened brand image,' together with competitive pressures and the faltering economy.

US retailer Circuit City plans to put more emphasis on "improving the customer experience" in its stores, in the wake of a $162.7 million loss for the second quarter of its 2009 fiscal year. Earlier efforts to do that haven't been "sufficient to reverse our overall business results," acknowledged Bruce H. Besanko, executive VP and CFO.

Circuit City has been "gaining traction" in bettering the customer experience, as well as in "rebuilding [its] selling culture" and improving its close rates on sales, Besanko said in a statement today.

However, the consumer electronics retail chain has undergone a "significant decline in traffic," Besanko said, placing the blame on a "weakened brand position" along with competitive pressures and a worsening of the overall economy.

Circuit City did show some growth in home theater installations over the same quarter last year. But these gains were offset by a decline in its Firedog PC services. The retailer also felt double-digit losses in notebook and desktop PCs, audio, and digital imaging products such as camcorders and DVD hardware, although losses were only in the single digits in some other categories, such as video gaming, flat panel TVs, and navigation products.

Yet it seems to singing a more frantic tune right now than over the two previous quarters, when its sales also slid downwards.

Two quarters ago, the chain's sales numbers "showed some progress, and we expect continued improvement from our turnaround strategy for fiscal year 2009," said CEO and Chairman Philip J. Schoonover, in a conference call with analysts in early April.

Then, in a statement issued after the close of the first fiscal quarter, Schoonover maintained that Circuit City seemed to be delivering an improved "customer experience" at the time, based on the result of scores of third-party "mystery tests" -- a type of test in which paid personnel typically pose as actual shoppers and then report back on their experiences.

In response to its second quarter loss, Circuit City plans to undertake a "comprehensive review of the business," and the company has already identified "key initiatives to drive performance in the holiday season," according to today's statement.

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