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Circuit City counts on strong holiday sales, CEO says
Although Circuit City Stores delivered disappointing financial results for the third quarter, the company’s web site is generating record holiday traffic and sales, CEO Phillip Schoonover says. Web sales are expected to top $1 billion for 2006.
Managing Editor, B2B E-commerce
Even though Circuit City Stores Inc. delivered disappointing third-quarter financial results, CircuitCity.com is generating record holiday traffic and sales, CEO Phillip Schoonover recently told Wall Street. With solid holiday results, total web sales for CircuitCity.com should top $1 billion in 2006.
In a recent conference call with Wall Street analysts, Circuit City chief financial officer Mike Foss noted that CircuitCity.com established a number of new traffic and sales records for the long Thanksgiving weekend. “On Thanksgiving Day, we set a record for sales on CircuitCity.com with sales growing more than 200% versus a very strong prior year,” Foss says.
In time for the holidays, Circuit City redesigned CircuitCity.com and added a new merchandising approach. ‘We relaunched CircuitCity.com on Nov. 7th and while we made many changes to the site, a major focus area for this new release was on solution selling,” Schoonover says. “We unveiled a new mass test that emphasizes three ways to buy; we added perpetual shopping carts so the customer doesn`t have to navigate through multiple pages to make their purchase; and we enhanced solution offerings, including the addition of FireDog services. Selling the total solution is important to growing average ticket and improving profitability with our web-generated sales.”
In the third quarter, web sales rose by 67%, though Circuit City, No. 17 in the Internet Retailer Top 500 Guide to Retail Web Sites, didn’t break out specific numbers. For Q3, Circuit City posted a net loss of $16 million on revenue of $3.1 billion vs. net income of $10.1 million on sales of $2.9 billion in Q3 2005.
“We now expect that more than half of our fiscal year 2007 web-originated sales to be picked up in stores as the shift to more televisions in online-only products continue,” Foss says. “We continue to expect to generate $1 billion or more in web-originated sales during this fiscal year.”