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Thread: RIP Circuit City

  1. #1
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    Default RIP Circuit City

    Circuit City, born 1985, died 2009

    NEW YORK (CNNMoney.com) -- Bankrupt electronics retailer Circuit City Inc. said Friday it will close its remaining 567 U.S. stores and sell all its merchandise.

    The company said it has 34,000 employees.

    "We are extremely disappointed by this outcome," James Marcum, acting CEO for Circuit City, said in a statement. "We were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company."

    In a filing with the U.S. Bankruptcy Court for the Eastern District of Virginia, which a judge approved late Friday, Circuit City - the No. 2 electronics retailer after Best Buy (BBY, Fortune 500) - said it had reached an agreement with four companies to start the liquidation process.

    The company said the sale would begin Saturday and run until March 31, pending court approval.

    The retailer's Web site and call center will cease to operate after Jan. 18.

    Circuit City said employees will receive 60 days' notice of the termination.

    Employees who are laid off earlier will get pay and benefits for the 60-day period beginning Friday, the retailer said.

    Those who remain with the company to assist with the liquidation, will receive pay and benefits.

    Circuit City also operates about 765 retail stores and dealer outlets in Canada. The company said its Canadian operations, which employ 3,000 workers, will continue to operate.

    The company said it will redeem its gift cards through the liquidation sale, but the cards will have no value once the stores are closed.

    "This is very significant. It shows you how bad things are for the retail industry," said George Whalin, president and CEO of Retail Management Consultants.

    Whalin said management mistakes over the past few years combined with the recession brought down Circuit City.

    "This company made massive mistakes," he said, citing a decision to get rid of sales people and other mismanagement.

    What's more, given the credit market freeze, Whalin added that no manufacturer wants to sell to any retailer who doesn't have money to pay for the merchandise.

    At the same time, Whalin said there's still a very slim chance that one or more firms that have expressed an interest in buying Circuit City could still buy it out of bankruptcy over the next few days.

    "I wouldn't say it's completely over yet for Circuit City, but it's almost over," Whalin said.

    Love Goel, CEO of Growth Ventures Group, a private equity firm focused on retailers, agreed with Whalin.

    "Circuit City isn't a viable business in its old incarnation when half of electronics sales have moved online," Goel said. "CompUSA and Tweeter also didn't make it for the same reason," referring to two stores forced to close most or all of their locations.

    However, Goel speculated that Circuit City could still find a lifeline if Golden Gate Capital, one of the reported lead bidders for the merchant, bought the company and restructured it primarily as an online business with very few physical stores.

    "This would eliminate overhead costs, vendor conflicts and other issues," he said. "Circuit City has an almost $1 billion online business. So there is a future for it in that regard."

    NPD Group's retail analyst Marshal Cohen warned that no retailer is "sacred" in this environment unless "you have a service model that differentiates you from the competition and keeps pace with changing needs of the consumer."

    He said Circuit City was late to the game with its Firedog customer service business, and it didn't resonate with customers as well as Best Buy's Geek Squad was business.

    What's more, Cohen said Circuit City found itself in the unfortunate position of becoming the "monkey in the middle" as Wal-Mart (WMT, Fortune 500) aggressively moved into the electronics market with its low prices model, and Best Buy continued to widen the gap with its competitors and dominate as the industry leader.

    "Circuit City just got stuck in the middle for too long," said Cohen.
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  2. #2
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    Default

    I find it hilarious. Circut City just opened a brand spankin' new store in my town at the end of October, and now their liquidation sale begins tomorrow.

    I'm going to hold off for a bit after the initial sale for a 2nd round of price-drops(generally happens toward the very end of liquidations), but eventually get in there and buy a bunch of things that I'm too cheap to buy under normal circumstances.

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  3. #3
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    Default

    This is no good. I kinda liked them.
    At least we still have Best Buy.

  4. #4
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    Default

    eh, there goes anouther 34,000 employees, at this rate iits going to be a miracle if anyone has a job... i really liked circuit city too.... oh well

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  5. #5
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    God, that sucks. I like Circuit City better than Best Buy. They just always seemed to have better service.

    Stupid blue vests...

  6. #6
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    Wow .. didn't really care for them (bestbuy is better IMO, unless of course, they go next), but that sucks.

  7. #7
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    Pretty old news but hey times are pretty bad. I hope the remaining stores in their sector benefit from their customers and no more close

  8. #8
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    Aw, poor Circuit City. I sorta liked their stores. Well, I liked them better than Best Buy.

  9. #9
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    I preferred Circuit City over Best Buy personally. Their service and customer help assistance was better in my opinion and from my own experience. Hate to see them go now. I didn't think they were doing that bad to be honest, but looks like I was wrong. Anyway, I'll probably go check out these last sales.

  10. #10
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    You guys must have great Circuit Cities, because mine is terrible. Back when I wanted the Wii there was an instance...

    "Hi, do you have any Wii's?
    "No"
    "Could you check?"
    "Not at the moment"
    "Do you know where there will be any shipped"
    "Hi, do you need any help?" *To other lady*

    I SAY GOOD RIDANCE!

  11. #11
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    I dont really care, the closest CC to me is like a half hour away or so, and bestbuy is like 10 minutes from here. But it sucks for all the people losing their jobs.

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    I'm only surprised it didn't happen much, much sooner.
    Ehhh, I dunno if I'll stick around. We'll see.

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    Quote Originally Posted by Xero XIII View Post
    I find it hilarious. Circut City just opened a brand spankin' new store in my town at the end of October, and now their liquidation sale begins tomorrow.
    One opened next to our brand-new Target {Which is doing well, thank you} just a couple weeks ago. The place immediately began posting signs saying 50% off. 50% became 60%, 60% became 70%, etc., etc.

    Like MP2K, surprised it didn't happen earlier.
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  14. #14
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    Living in Richmond, Virginia (home of Circuit City's headquarters), I have heard numerous things about them shutting down. I am surprised that it has lasted this long, mostly because Circuit City has had the "bright" idea to have their stores across the street from a Best Buy, both in Virginia and other states (there was once a running gag that in order to find a Best Buy, all you had to do was look for a Circuit City).

    It is sad to see it go (who am I kidding; I haven't stepped into a Circuit City in three years and the headquarters is only a few miles away) but it is time to put the old dog out of its misery.
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  15. #15
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    I've never been there... but I think it's really sad that so many businesses are being broken down.

  16. #16
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    i never bought anything from circut city...but its sad that it gonna go poof.

    good thing there is a best buy directly across the street from the local Circut City
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  17. #17
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    Who is it to blame? Bush? Well I don't know...really...

    Best Buy is the next target.


  19. #19
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    its what they deserve for bad customer service. My computer we bought from them was broken and even though we paid to get a warranty they didn't help us. Good riddance.
    Last edited by Twig Ee; 01-18-2009 at 03:35 PM.

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  20. #20
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    X_X i have a friend who used to give me mad discounts. they might not have been as good as fries or best buy but still.......
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    Live to ride, ride to live.

  21. #21
    Senior Member Lola Granola has a reputation beyond repute Lola Granola has a reputation beyond repute Lola Granola has a reputation beyond repute Lola Granola has a reputation beyond repute Lola Granola has a reputation beyond repute Lola Granola has a reputation beyond repute Lola Granola has a reputation beyond repute Lola Granola has a reputation beyond repute Lola Granola has a reputation beyond repute Lola Granola has a reputation beyond repute Lola Granola has a reputation beyond repute Lola Granola's Avatar
    Gil
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    Months behind.

  22. #22
    Senior Member Ridana has a reputation beyond repute Ridana has a reputation beyond repute Ridana has a reputation beyond repute Ridana has a reputation beyond repute Ridana has a reputation beyond repute Ridana has a reputation beyond repute Ridana has a reputation beyond repute Ridana has a reputation beyond repute Ridana has a reputation beyond repute Ridana has a reputation beyond repute Ridana has a reputation beyond repute Ridana's Avatar
    Gil
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    In McKinney, TX they opened a store in a shopping center across the road from a shopping center that had a Best Buy already. I thought it was pretty stupid. About 3 months later it was one of the Circuit Cities that was dropped in the pre-christmas round of closings.

    I figure I'll start keeping a look-out for deals on things I can use for my studio again. I got some decent deals the first time around, but even when they cut their prices I was able to go to Comp USA and Fry's Electronics and still find some things cheaper.

  23. #23
    Senior Member LittleGirl has a reputation beyond repute LittleGirl has a reputation beyond repute LittleGirl has a reputation beyond repute LittleGirl has a reputation beyond repute LittleGirl has a reputation beyond repute LittleGirl has a reputation beyond repute LittleGirl has a reputation beyond repute LittleGirl has a reputation beyond repute LittleGirl has a reputation beyond repute LittleGirl has a reputation beyond repute LittleGirl has a reputation beyond repute LittleGirl's Avatar
    Gil
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    I have never seen a Circuit City in my life. Maybe they don't have them here. It's all about Best Buy.

  24. #24
    Senior Member Zenni-Kun has a reputation beyond repute Zenni-Kun has a reputation beyond repute Zenni-Kun has a reputation beyond repute Zenni-Kun has a reputation beyond repute Zenni-Kun has a reputation beyond repute Zenni-Kun has a reputation beyond repute Zenni-Kun has a reputation beyond repute Zenni-Kun has a reputation beyond repute Zenni-Kun has a reputation beyond repute Zenni-Kun has a reputation beyond repute Zenni-Kun has a reputation beyond repute Zenni-Kun's Avatar
    Gil
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    i can see it now, Today Circuit City, Tomorrow Wally World

    My sister is Kissed by Neji my OTHER sister is Morning Grace.......i gots family!

  25. #25
    This title does nothing. Khanxay has a reputation beyond repute Khanxay has a reputation beyond repute Khanxay has a reputation beyond repute Khanxay has a reputation beyond repute Khanxay has a reputation beyond repute Khanxay has a reputation beyond repute Khanxay has a reputation beyond repute Khanxay has a reputation beyond repute Khanxay has a reputation beyond repute Khanxay has a reputation beyond repute Khanxay has a reputation beyond repute Khanxay's Avatar
    Gil
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    Irving Mall Circuit City in Texas: 10% off sales at the moment and prices don't look all too low. I'll wait.

    This signature contains nothing.




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