At the risk of revealing my age, I can recall the era when Best Buy faced a formidable competitor in the form of superstore chain Circuit City. Combining elements of an appliance store and an all-encompassing electronics retailer, Circuit City was the go-to destination for tech enthusiasts like myself. I fondly remember spending hours replaying video game demos while my parents shopped for household appliances.
Fun fact: P. Diddy once hosted an album release party at Circuit City’s flagship store in NYC. The nostalgia!
Nearly two decades have passed since Circuit City rivaled Sears in size, and around 15 years have elapsed since the chain filed for bankruptcy, leading to the closure of all its physical stores. After operating solely as an online retailer for a period, Circuit City is now gearing up for a comeback, or at least attempting to raise funds for one.
This week, the holding company for Circuit City, incorporated in Delaware, filed paperwork with the SEC indicating its intention to raise $25 million. Circuit City, under the ownership of self-described “retail veteran” Ronny Shmoel since 2016, who also serves as the CEO, did not respond to a request for comment. Presumably, this fundraising effort aligns with the Series A announced by Circuit City in a press release back in November.
So, what’s the plan for the $25 million if the fundraising is successful? Unfortunately, it doesn’t involve opening brick-and-mortar stores. Instead, Shmoel intends to establish “strategic alliances” with undisclosed national companies, potentially including JCPenny, to launch a co-branding program called “Powered by Circuit City.” This program aims to empower customers to explore and purchase a curated range of electronics bearing the Circuit City brand.
Essentially, Circuit City plans to offer physical and e-commerce retailers access to its private label products, the remnants of its online retail platform, and its customer service organization. Shmoel positions this as a way for retailers to tap into the potential of their spaces without having to develop in-house expertise and infrastructure.
In a prepared statement, Shmoel emphasized that these partnerships represent a collaboration of iconic brands, showcasing Circuit City’s dedication to innovation and commitment to delivering AI-driven solutions to a broader customer base.
This strategy has echoes of the past, reminiscent of Samsung and Microsoft launching “mini-stores” in Best Buy locations years ago to emulate Apple’s success. While not outright failures, these mini-stores didn’t achieve the desired success, especially in Samsung’s case.
The challenge for Circuit City seems significant, especially considering its web ranking. Similarweb, a web data analytics site, ranked Circuit City’s website 842nd in the consumer electronics category at the time of publication.
Yet, retail comebacks are not unprecedented. Perhaps Circuit City will follow in the footsteps of another cherished brand from my childhood, Toys “R” Us, and reemerge as a formidable player. On the other hand, it may struggle to secure the modest capital it seeks, continuing its gradual decline into cultural irrelevance.
The verdict won’t be long in coming. Circuit City plans to launch its co-branding program online and in select locations this year, with more extensive rollout plans slated for 2024.
