Yeah, I left before the summer started. I will say, when I left, my local store was doing well with payroll, productivity and profitability. After my departure from that location last April, it tanked - hard. And now it's closed completely.
The problem with the company is the complete incompetence of its corporate executives and high ranking field management. The economy is partly at fault here, but the company's corporate culture main culrpit.
I mean, last Friday, some managers (one of my friends included) were given virtually no notice, in some cases as little as three days, to pack up and close shop.
On Monday, they announced large scale corporate restructuring and the closing of hundreds more GameCrazy locations. The only positive note is that the managers informed of the closings yesterday are being given a month to get their affairs in order.
As early as a few months ago, the company ran into serious cash supply problems, failing to replenish GameCrazy stock allocations after their first shipment (and usually sent only enough to cover pre-orders, as they're guaranteed sales) of new releases.
And despite the fact that it is over a year removed from bankruptcy, the company made almost no effort to remove overhead costs - which were ridiculous.
Not only did they have multiple corporate offices, but almost every Hollywood Video/GameCrazy location had two separate District Managers and two separate Regional Directors.
In a location shared by both Hollywood Video and GameCrazy, both sides have separate managers and payroll (with few exceptions). This would lead to large, specialized teams on both sides that could not assist or coordinate with one another.
That kind of overhead is unsustainable.
By the time corporate offices were shuttered in Oregon, and corporate restructuring began this month, it was too late.
The company also enacted strict termination practices based on arbitrary numbers, for both games and video retail, leading to an extremely high turnover rate. At the rate the company began to burn through field managers, store managers and associates, properly training employees took a back seat to simply staying afloat.
This, obviously, lead to a noticeable drop in customer satisfaction. You can't lose a significant chunk of your work force and expect exemplary customer service; the same problem plagued Circuit City up until its demise.
The corporate line is that layoffs and closures will allow the company to consolidate inventory and save funds for Q4 purchasing.
However, considering some of the markets that the company has completely removed itself from, its unlikely that the business will make it through the holidays unscathed.
It's a shame that the company was hit by a recession, but you really got to lay the blame at corporate. They were content to let the good times roll, even after bankruptcy, as if things never changed - and a lot of good people lost their jobs this weekend as a result.
