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The Washington Post reports that Circuit City’s strategy of firing its higher-paid, more experienced employees as a way of saving money appears to have backfired, with the company predicting future losses as consumers turn to rivals with experienced sales help.

Particularly affected, according to the Post have been the sales of big-ticket items like flat screen, high-definition televisions.

However, Circuit City management said it was withholding judgment on whether its strategy had backfired. “We will continue to monitor that," said Bill Cimino, a company spokesman.
KC's View:
It would be our opinion that the folks running Circuit City are about as smart as the rear end of a mule.

It got caught in the middle in a classic case of misjudging the market. It doesn’t have the sales help or expertise to compete with its better-educated rivals, and it doesn’t have the prices to compete with the likes of Costco and Wal-Mart. So it sits in the middle with an enormous target on its corporate back, standing for nothing and offering little in the way of a compelling reason for a consumer to walk in the front door.

We have both a Circuit City and a Best Buy near us, almost side by side. We never go into Circuit City…from a consumer perspective, it seems to be just taking up space.

This is an important lesson for every retailer to learn.