Circuit City 2009 Annual Report Download - page 10

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Table of Contents
recognition, broader product lines and greater financial, marketing, manufacturing and technological resources than us. Additionally, our results
could also be adversely affected should we be unable to maintain our technological and marketing arrangements with other companies, such as
Microsoft®, Intel® and Advanced Micro Devices®.
With conditions in the market for technology products remaining highly competitive, reductions in retail prices, as we experienced in 2009,
would adversely affect our revenues and profits. Additionally, we rely in part upon the introduction of new technologies and products by other
manufacturers in order to sustain long-term sales growth and profitability. There is no assurance that the rapid rate of such technological
advances and product development will continue.
Current economic conditions raise additional factors as the loss of consumer confidence in the Company’s markets could result in a decrease of
spending in the categories of products we sell. It is also possible that as manufacturers react to the marketplace they may reduce manufacturing
capacity and create shortages of product.
Industrial Products
The market for the sale of industrial products in North America is highly fragmented and is characterized by multiple distribution channels such
as small dealerships, direct mail distribution, internet-based resellers, large warehouse stores and retail outlets. We also face competition from
manufacturers’
own sales representatives, who sell industrial equipment directly to customers, and from regional or local distributors. Many high
volume purchasers, however, utilize catalog distributors as their first source of product. In the industrial products market, customer purchasing
decisions are primarily based on price, product selection, product availability, level of service and convenience. We believe that direct
marketing via sales representatives, catalog and the internet are effective and convenient distribution methods to reach mid-sized facilities that
place many small orders and require a wide selection of products. In addition, because the industrial products market is highly fragmented and
generally less brand oriented, it is well suited to private label products.
Software Solutions
In June 2009, the Company announced plans to exit the Software Solutions segment as the result of economic conditions and difficulties in
marketing the segment’s products successfully (See Note 7 to the Consolidated Financial Statements included in Item 15 of this Form 10-K ).
Our Software Solutions segment participated in the emerging market for on-demand, web-based business software applications through the
marketing of our PCS ProfitCenter Software ™
application. As of December 31, 2009 substantially all of the third party business activities of the
Software Solutions segments had been ended.
Employees
As of December 31, 2009, we employed a total of approximately 5,000 employees, of whom 3,500 were in North America and 1,500 were in
Europe.
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