Circuit City’s CEO Philip Schoonover has done a couple interviews this week, one with the WSJ and the other with the Times-Dispatch of Richmond, VA (Circuit City’s Headquarters). Here are some of the more interesting questions and answers from the two interviews.
WSJ: Why do you think the new, smaller-sized store will improve Circuit City’s profitability and sales growth?
Mr. Schoonover: It offers a different experience. Customers can touch and compare, and learn how to use the most complex products and services that we sell.
It is a more efficient use of space. Typically, our stores are 35,000 square feet, and less than 18,000 of that is selling space. The new prototype is 20,000 and has 17,000 of selling space. This fundamentally changes the economics. We can get higher revenue per square foot, higher-margin dollars per square foot, and we can find additional sites that weren’t necessarily available for our old box.
I’m a big believer in high interactivity shopping experiences, so it will be interesting to see what they do with the new store format. The main concern I have is the smaller stores. Will this mean a smaller product selection? Will they turn into the Radio Shacks in the malls? It’s almost as if they are positioning themselves between Best Buy and Apple, and I’m not sure they can build an identity between these two and flourish. Apple has set the bar high for shopping experience and Best Buy’s product selection is better than all except for Fry’s and a couple regional players. (continue reading…)
