Sixty years. That’s how long it took for Circuit City to build a network of 700-plus stores from Portland, Maine to Portland, Oregon—stores that provided a paycheck and benefits for nearly 40,000 employees.

Eleven. That’s the fraction of companies—out of a long list of 1,435—business author Jim Collins and his team researched and described as “great” in the 2001 uber best seller Good to Great. Circuit City was among that prestigious 11.

Five months. That’s how long—from Circuit City’s Chapter 11 filing in November to the projected conclusion of its liquidation in March—it will take for the company to disappear.

Poof! Seven hundred stores, 40,000 jobs, and one of the top 1% of all businesses in the world to qualify as “great” completely wiped off the retail map in fewer days than a baseball season. If that doesn’t make the hair stand up on the back of a retail executive’s neck, nothing will.

So what happened?

The economy is the obvious, easy answer. The most dramatic pullback in consumer spending since the 1970s has and will have a profound impact on all retailers. But two critical missteps by Circuit City’s leadership prior to the global economic meltdown were the first nails in the retailer’s coffin:

1.    Flat panel fiasco. In 2006, keeping up with the Jones’ meant one thing: purchasing a shiny new flat panel television. During the holiday season, TV manufacturers began chopping prices to gain market share, and retailers followed suit, battling one another with big promotions in hopes of becoming destination of choice for flat-panel shoppers. Circuit City was even more aggressive than its competitors, dropping prices so low it couldn’t sell enough TVs to offset the pricing plunge. The result was a shocking $16 million loss for the company’s fiscal quarter (compared to a profit of $10.1 million it recorded in the same fiscal quarter a year earlier). Already lagging Best Buy by a few strides, this strategic blunder put Circuit City a full length behind its biggest competitor—a distance it would never make up.

2.    Out with the old. In early 2007, still reeling from its flat panel fiasco, Circuit City decided it needed to seriously tighten the belt. It did so by laying off 3,400 of its most experienced, and highest paid, frontline employees. The retailer’s ability to provide customer service and a strong customer experience immediately collapsed—and the numbers indicate shoppers responded by doing business with Best Buy. In the second quarter of 2007, Circuit City reported losses of $62.8 million. The situation went from bad to worse when third quarter results were tallied: $207.3 million in losses. And in the fourth quarter of 2007, as Best Buy reported an impressive 18.5% jump in profits, Circuit City reported another loss as sales widely missed estimates.

Pricing, customer service, and the customer experience—all retail fundamentals Circuit City managed to botch badly. Include the economic collapse into the equation, and it adds up to a once “great” retailer’s untimely demise.

The moral to the story is clear: in the current economic climate, missteps are magnified to the Nth degree, and if retailers want to survive, they must get back to basics and focus on the fundamentals.