Circuit City Stores Inc. continues to fine-tune CircuitCity.com in an effort to improve sales and expedite its turnaround plan, CEO Philip J. Schoonover told Wall Street analysts on the company’s recent first quarter earnings call.
By the end of the year, Circuit City, No. 17 in the Internet Retailer Top 500 Guide, expects to add transaction processing capability to Firedog.com, the company’s integrated services site, and along with personal computer services and home theater installation, add more mobile installation services. “To enhance both the customer experience and our own financial performance we must move beyond TVs and focus on audio, DVD, accessories, games, services and digital lifestyle products that bring our individual products together,” Schoonover told analysts.
Circuit City also is consolidating and relocating two distribution centers into a new fulfillment facility in Scranton, PA, that will concentrate on picking, packing and shipping online orders. “The new distribution center will be optimized for web shipments and will be able to ship small and large goods on the same truck to the Northeast and Mid-Atlantic,” Circuit City executive vice president of merchandising, services and marketing David Matthews told analysts. “Previously those areas were served by two centers; one shipped large product and the other small products.”
Though it doesn’t break out quarterly web sales, Circuit City, which generated $1 billion in web sales in 2006, says its direct sales rose by 21% in Q1. “We continue to see positive results from our in-store pickup offering and an increase in use in our extended web assortment to fill special orders in store,” executive vice president of multi-channel sales George Clark told analysts.
In the first quarter Circuit City posted a net loss of $54.8 million on net sales of $2.48 billion vs. net income of $6.3 million on revenue of $2.59 billion in the prior year. In March, Circuit City announced plans to outsource its information technology program, including web hosting to IBM, close about 60 international stores and terminate 3,400 employees.
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