Remember Circuit City? How It Built 600 Stores — and Then Disappeared

If you bought a television in the 1980s or 1990s, there’s a good chance it came from a big red building with bold white letters: Circuit City.

You walked in and saw rows of VCRs, camcorders, and stereo systems. Salesmen wore dress shirts and ties. The TVs were stacked high along the walls. It felt like the future lived inside that store.

By the late 1990s, Circuit City wasn’t a niche chain. It was everywhere.

Circuit City was founded in 1949 in Richmond, Virginia. By the early 2000s, it had grown to more than 600 stores across the United States. For many middle-class families, it was the default place for electronics.

At its peak in 2000, the company generated roughly $12 billion in annual revenue. It ranked among the largest specialty retailers in the country.

The question is simple:

If it was that big, what broke?

Circuit City’s core strength was structured selling.

Unlike discount stores, it relied heavily on commissioned salespeople. The pitch mattered. Employees were trained. Higher-margin items like extended warranties boosted profits. Big-ticket electronics carried thin margins, but add-ons made up the difference.

This worked in an era before price transparency. In the 1990s, you didn’t check five websites before buying a TV. You compared what was in front of you.

The company also benefited from timing. Consumer electronics were exploding. DVD players, home theater systems, desktop computers — demand rose sharply through the 1990s.

For a while, scale worked in its favor.

Then scale turned against it.

By the mid-2000s, competition intensified. Best Buy, Walmart, and online retailers squeezed margins.

In 2007, Circuit City made a decision that would define its final chapter.

The company fired about 3,400 of its highest-paid sales associates and replaced them with lower-wage employees.

The move reduced payroll costs. On paper, it made sense. Labor was expensive. Margins were tightening.

But something else happened.

The customer experience changed.

Electronics retail depends on trust. When products get complex — computers, audio systems, warranties — shoppers want someone who knows what they’re talking about.

Circuit City removed much of that knowledge base in one move.

Sales slowed. Customer traffic declined. Debt remained.

By 2008, the company filed for bankruptcy.

In 2009, all remaining stores closed.

The failure wasn’t sudden. It was structural.

Electronics retail became a low-margin, high-volume business. Online players cut prices. Big-box competitors optimized logistics. Television prices fell year after year.

Circuit City had large stores, high fixed costs, and declining pricing power.

At its peak, it employed roughly 40,000 workers. When revenue declines hit, that size became a burden.

Scale can protect a company. It can also lock in costs.

Circuit City wasn’t small. It wasn’t obscure. It wasn’t underfunded.

It generated billions in revenue and operated nationwide.

But the economics of the industry shifted faster than its model could adjust.

The red sign is gone.

The lesson isn’t sentimental. It’s mechanical.

A retail chain built on commissions and in-store expertise struggled when pricing moved online and margins collapsed.

You remember the store.

The business behind it ran at national scale — until the math stopped working.