Circuit City to shut down

[NickD 202]

Wow, I was just talking to a financial adviser yesterday and he thought Circuit City was on its way back......you can bet I won't be taking finanical advice from him

Ha, drove though Madison last month, told wife would like to stop at Circuit City to check on bargains, was already closed, have no idea when. Best Buy used to equal or beat any advertised price, even from mail order catalogs if you remember those, but that was like 15 years ago. Since then, only purchased one item from Best Buy when it was a best buy. Today, they have more sales assistants than customers, can't even walk to the rear of the store without getting hit on a zillion times.

[Ban Hammer 12,861]

Wow, I was just talking to a financial adviser yesterday and he thought Circuit City was on its way back......you can bet I won't be taking finanical advice from him

is his last name madoff?

[spookyturtle 9,465]

I never shopped there much, I like Best Buy better, but I am sorry to see another 30,000+ losing their jobs. Plus that takes away a big chunck of the competiotion for Best Buy. Compettion is good for business, good for the consumer.

[HAL 9000 96]

Sucks for my friends that passed up other job offers in November's store closings to stay in the company on a transfer only to lose their jobs in the coming weeks. As usual, the cake's frosting will be eaten by those washing their hands off of the matter. Couldn't say I didn't see this coming years ago.

I recommend CCity customers move on to online retailers like newegg and amazon... BB is already testing newer anti-competitive waters with higher prices on some things.

[Aubrey 10]

Eeek. Personally I hate Best Buy. They drove me off when they kept trying to sell extra ####### to me at every stage of the sale, including the register. Moved away from the city several years back and hadn't realized CompUSA had closed, so I'm sort of in shock.

Seeing so many big companies close is scary stuff!

[Niels Bohr 72]

Their shore closed at 35 cents. Sad.

[Shad and Dani 3]

NEW YORK (CNNMoney.com) -- Bankrupt electronics retailer Circuit City Inc. said Friday it has asked for court approval to 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, 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 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, an investment banking 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."

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."

http://money.cnn.com/2009/01/16/news/compa...sion=2009011611

The customer service there was horrible!! Not that Best Buy is much better. You always have to deal with idiot sales people in those stores.

[JVKn'CVO 11]

I agree with the customer service part. Happened to us and ended up at best buy as well

Saludos,

Caro

[rebeccajo 14]

We don't have a Best Buy in our town, so when the Circuit City store closes we won't have a specialty electronics retailer (except for Radio Shack and they don't sell the big stuff).

For the last year or so, it's been virtually impossible to find somebody to help you. They were horribly understaffed. We went in the store about two weeks ago and could find a TV salesperson, but stood around in the PC's for about 15 minutes before we gave up.

We've been talking about a new television. Maybe we ought to head over there today.

[Mr. Big Dog 10,747]

Circuit City? The same store that decided a few years back to lay off their experienced sales and service staff to replace them with minimum wage personnel? What a genius plan! I'm sure someone pulled in large figure bonuses for this scheme. And what do the employees, customers and shareholders get? Yep: shafted!

[rebeccajo 14]

Circuit City? The same store that decided a few years back to lay off their experienced sales and service staff to replace them with minimum wage personnel? What a genius plan! I'm sure someone pulled in large figure bonuses for this scheme. And what do the employees, customers and shareholders get? Yep: shafted!

Yeah they did do that.

There's a guy who works with Wes who was one of the ones they let go back then. Later on they offered him and all the other people they had done that to their jobs back but at a lower rate of pay.

It's not a coincidence that after that customers could find no one in the stores to wait on them.

[Mr. Big Dog 10,747]

Circuit City? The same store that decided a few years back to lay off their experienced sales and service staff to replace them with minimum wage personnel? What a genius plan! I'm sure someone pulled in large figure bonuses for this scheme. And what do the employees, customers and shareholders get? Yep: shafted!

Yeah they did do that.

There's a guy who works with Wes who was one of the ones they let go back then. Later on they offered him and all the other people they had done that to their jobs back but at a lower rate of pay.

It's not a coincidence that after that customers could find no one in the stores to wait on them.

Yep, this place was actively managed into the ground - focus on the quarterly results over the long term interest of the company. Happens all over America.

[rebeccajo 14]

Circuit City? The same store that decided a few years back to lay off their experienced sales and service staff to replace them with minimum wage personnel? What a genius plan! I'm sure someone pulled in large figure bonuses for this scheme. And what do the employees, customers and shareholders get? Yep: shafted!

Yeah they did do that.

There's a guy who works with Wes who was one of the ones they let go back then. Later on they offered him and all the other people they had done that to their jobs back but at a lower rate of pay.

It's not a coincidence that after that customers could find no one in the stores to wait on them.

Yep, this place was actively managed into the ground - focus on the quarterly results over the long term interest of the company. Happens all over America.

I agree.

The first place companies cut (when they need to cut the budget big-time) is payroll. I can understand the mathematical logic of that because it is the biggest single line item in most balance sheets.

But IMO that's the point where math doesn't meet common business sense. If the business is in bad enough shape to have gotten to the point they can't pay their people, the root cause rarely lies with the people.

I'm not so sure this is strictly an American business phenomenon. It is a modern global business challenge. How to stay flexible enough to keep pace with changing marketplaces. The world just moves more quickly than it used to. Business cannot rest on its laurels - they have to watch trends and changing demands. They have to be willing to change.

[DaveHanna 0]

Circuit City did not go out of business, they filed for chapter 11 bankruptcy, which is very different.

Chapter 11 allows a company to hold off creditors while it attempts to restructure its finances by closing stores, laying off employees, etc.

[rebeccajo 14]

Circuit City did not go out of business, they filed for chapter 11 bankruptcy, which is very different.

Chapter 11 allows a company to hold off creditors while it attempts to restructure its finances by closing stores, laying off employees, etc.

Did you read the news?