Hasta La Creative!

Sorry for all the bad puns, but hey, a bad brand deserves bad puns. I wrote back in March about Circuit City’s decision to fire 3000 employees, the ones who were the most knowledgeable on the sales floor. Of course, at the time, it was a way to make Wall Street happy by lowering costs and boosting profits.

Well, Wall Street is not happy. From the Chicago Tribune:

Shares of Circuit City Stores Inc. lost more than a quarter of their value Friday after the firm posted a wider-than-expected third-quarter loss and said it wouldn’t make money this quarter either, prompting analysts to question whether it should hang out a “for sale” sign.

The stock fell $1.91, or 28.7 percent, to $4.75, on the New York Stock Exchange. It was the biggest drop since February 2002.

“Clearly, we are very disappointed,” Chief Executive Philip Schoonover told analysts during a conference call. He said the company underestimated the financial impact of cost-saving initiatives on sales.

Analysts were clearly disappointed. The results were “absolutely astonishing to us,” said Christopher Horvers, an analyst at Bear Stearns & Co. “If they don’t turn around in the fourth quarter, it will raise the likelihood that this company goes down a dark path.”

Well, it’s not astonishing to me. The in-store experience is one of the most important things they have. Getting rid of 3000 smart workers wasn’t the answer. They’ve killed their brand.

When will corporations and marketers realize that cutting costs isn’t always the answer to their problems?