Circuit City to close 155 stores

Circuit City Stores announced Monday it plans to close 155 stores and lay off 17 percent of its workforce in the U.S., as it aims to restructure its business amid a tightening credit market and downturn in business.

Over the past few weeks, the retailer's financial health has become more dire and, according to a report in The Wall Street Journal, was considering restructuring moves as a means to avoid a Chapter 11 reorganization bankruptcy filing.

(Credit: Circuit City Stores / Richard Cadan Photography)

The struggling electronics retailer noted in its announcement that not only have its sales dropped amid an economic slowdown and loss in consumer confidence, but also its suppliers have begun cutting back on the level of credit they are extending to the retailer.

"The current mix of terms and credit availability is becoming unmanageable for the company," Circuit City noted in its announcement.

That cutback by suppliers comes at a critical time for Circuit City, as it heads into the holiday buying season when it wants to replenish its stock with the popular items.

The company plans to begin a liquidation sale at its 155 stores targeted for closing (PDF) on Wednesday and is expected to continue the sale through the rest of the year.

Circuit City also plans to scale back plans to open new stores to two from 12 in the current fiscal year and suspend all store openings for 2010. The company will continue to operate in 153 U.S. markets and overseas, but will be exiting 12 U.S. markets as a result of the restructuring.

Other woes for Circuit City include a potential delisting of its stock from the New York Stock Exchange. Last week, the NYSE warned the company its stock price had fallen below $1 for 30 consecutive trading days, a trigger point for a potential delisting.

The NYSE warned the company on Oct. 24 and Circuit City has 10 days to resolve the issue. One common means that companies use in this situation is a reverse stock split, in which investors who hold a certain number of shares can swap them for a single share in the issuer's stock. For example, 10 shares of stock trading at 50 cents each would become 1 share that trades at $5 a share.

[robertorosco]

Where service is state of the art!

[HlLLARY CLITON]

WalMart did it again! only Best Buy is left to conquer

[BigGuns149]

Somehow I doubt WalMart had much to do with it. While Walmart does sell some electronics their electronics department is so small that there are a lot of areas where Walmart doesn't overlap with CC at all. BB on the other hand I think had a lot to do with the decline of CC. Most CC stores are within 5 miles of a BB and virtually everything that CC sells BB sells as well. Since most BB stores have better selection and slightly better prices there wasn't much reason for someone to shop at CC.<br /><br />I haven't looked at the list of places where CC is closing stores, but I wouldn't be surprised if competition from Fry's played a role in what stores closed. When CompUSA did their first round of closing a lot of the stores that closed were near a Fry's store. Except for BB, Fry's has steamrolled most of their competition. I can never quite figure out why BB is popular. My only inference is that people think that BB has the best prices. It sure isn't because they have the best customer service.

[cyberDJ-2038765336053745013836]

Walmart isn't putting a dent in BestBuy. <br />Each store attracts different types of customers.

[zizzybaloobah]

Their firing of their experienced staff really backfired. I recently returned an item I bought online to physical location. They had at least a half-dozen people behind the service desk nothing (none of which looked or acted professional much less experienced), and it took a good five minutes for them to finally get around to helping me.<br /><br />I rarely buy any electronics at brick-and-mortar stores anyway. They're really only helpful if I want to see an item in person before I purchase it online.

[Rick Cavaretti]

Exactly! One and half years ago, Circuit City execs decided their hourly employees were making too much and were taking away from the bottom line (their bonuses). They fired them and replaced them with minimum wage clueless idiots. Did we learn a lesson? You don't fire experienced employees to save a buck. They are the true cornerstones of your establishment. I have not stepped into a CC since that announcement.

[Henry Michael Karshis]

I agree that most of the checkout staff, based on my experience anyway, is usually pretty much a bunch of clueless 20-something slackers looking at the clock, but I've talked to some very knowledgeable folks in both Circuit City's camera and TV departments. I hope our store in San Antonio remains open.<br /><br />HMK

[BigGuns149]

Generally speaking your cashiers aren't going to be hired to sell anything so I wouldn't be concerned about whether they are clueless or not. Provided they aren't letting customers scam the store by putting UPCs over the real ones or messing up transaction I would say that they are doing a good job. You hire your cashiers to be accurate and efficient and anything else is simply extra. It is nice to have someone who knows something about the products so that when one of your salespeople quits you could hire within, but other from that I wouldn't be concerned about your cashiers abilities beyond quicky and accurately checking out customers.

[chillys95]

so who's at fault? the "20 something slacker" who needs a job, or the 40s, 50s and 60 something executive idiots who decided to skimp on training and wages on employees and therefore resulted in poorly reps. don't put down someone else's generation when the fault clearly is with another.

[humbrew]

I live in the city where CC has its HQ and the service of every employee is pathetic. It took 5 employees to figure out an Apple TV was not a TV. This, after I explained it several times. Getting someone to help you that has a clue is impossible. Even if you find what you want, there?s an 80% chance it?s out of stock. CC has been clueless for 10 years now and it?s time the free market shuts them down. Fry?s, please open a store here.

[styymy]

The big wigs and upper management ran this store into the ground. They kicked experienced staff to the curb and brought in people with no experience on the products or services it offered and had no passion for what they were doing. The product offerings and selections got even worse. Brick &#38; mortar stores are getting rolled back by the online electronic retailers. Fry's is ok, too bad Newegg doesn't have brick &#38; mortar stores, they'd take BB to the woodshed.

[ittesi259]

Funny that all the big wigs and upper management are transplants from Best Buy....and have been for years....coincidence anyone?

[Zeeshan47]

part of newegg's advantage is the lack of brick-and-mortar. it panders to the digerati, lessening the necessity of informed associates, and very little to no overhead costs, meaning no leases to pay, and fewer employees wasting company time. the newegg warehouse, like any other warehouse, doesn't have greasy-faced teenagers avoiding their managers.

[1kingsfan]

I work at a Circuit City in Northern California. For everyone who hopes we go under...I wish the same for you and your job! Do you know how hard it's going to be for the 5,500 who lost their jobs to find another one THIS close to Christmas? My store isn't closing and I know Circuit City is doing their best to relocate those associates to other stores if there is room but there just isn't. Circuit City has been a good employer. We've tried turning things around and now all I hear from customers is how bad BEST BUY'S service is....not ours. A few years ago it was the complete opposite. My heart goes out to my fellow associates. Circuit City has made some poor decisions in the past but if we go under prices will go up. Where will you go to play with the toys before you order them online? Walmart didn't kill us and neither did Best Buy. Ultimately shopping online is what is going to hurt the brick and mortar stores. And while we're on the topic of losing jobs it'll be YOUR money my associates are living off of. Unemployment is their only option because there certainly aren't stores hiring this close to the holidays. Have a heart for crying out loud....you could be next in these troubled times!

[sonnyg91]

Circuit City ran it self into the ground. It's plauged with poor locations and bad inventory systems that leave the store with none of the product that its customers want. The CEO even said that they have poor, hard to access stores. A big factor in hearing more complaints about BBY compared to CC is how many more BBYs there than CCs. Just in Oklahoma there are nine BBYs. <br />Also, CC has a horrible SOP system. At my old store #3508, they have a supervisor for car install who doesnt even have a drivers license. They are killing themselves with the decisions corporate makes on running the stores... <br />thats why I moved to BBY.

[Zeeshan47]

It's not you, it's the suits above you. I really don't blame you.

[ferretboy88]

Bestbuy blows. The reason stores like these are in trouble is you can buy stuff online. Newegg etc.

[Joliet Eddie]

The problem with online buying for many items: you can't pick up the darn thing and try it out until it is shipped to your home and then, if you don't like it, ship it back. I'm always amazed on the consumer blogs of complaints from people who shop lowest price on the net and then find that the deal was lousy or the item lacked features or a user interface that was expected. This is true for digital cameras and laptops. You HAVE to try it out to know whether it works for you. How do you do that online? So goodbye stores and more hellos to crummy designs being foisted on us. And, no, reading others' comments is not the same.

[solitare_pax]

I'm sorry, but I haven't been in a Circuit City for years now - the last few times the service was simply awful, and after the fracas with their 'extended warranty' on a computer, I wouldn't buy anything more complex than a toaster oven from them.

[ssampier]

I am not a fan of Circuit City, generally. However, if CC leaves forever, what does that leave us? Best Buy, Fry's (in some locations), and... walmart; pathetic.<br /><br />We need good mid-size electronics stores, anybody?

[adam_hartung]

Does anyone remember that Circuit City, just a few years ago, was the best performing company in Jim Collins' book "Good to Great"? Obviously, Mr. Collins' approach to management is worth some reconsideration given the fall of Circuit City. It would seem a new approach to management would be worth considering. Read more at http://www.ThePhoenixPrinciple.com

[DarkHawke]

Dunno what everyone's freakin' about. Before Circuit City, there was The Good Guys. Before them, there was Future Shop. Before them, Silo. Probably one or two more before that I'm forgetting. This is how the market works, folks. A company mismanages itself or fails to respond to changing market dynamics and goes out of business, another company comes up to take its place. Happens all the time. Seems like there's a market niche out there for at least two general consumer brick-and-mortar electronics/computer stores out there. Another one will come along, just wait and see.<br /><br />Not to dismiss the temporal pain of the employees that get caught in the shuffle; it is a serious pain to get laid off. Though at this time of year, there's gonna be at least *some* seasonal work, so it ain't all black for you guys either.

[Sparky650]

I genuinely feel bad about those that lose their jobs but, I do have to say that every time I went into CC I felt I was being corralled in by their odd round the store setup. The people weren't very helpful as when I did find someone to help I had to practically plea with them for assistance. If I did find what I wanted to buy I had to go on a half hour safari to find someone to check me out. Many times I walked in and found 10 or so employees cuddled up in a corner and having the feeling when I asked for help that I was breaking up a team meeting..

[dennisl59]

Blame management. They drove this company into the ground. I look forward to the news reports of all the "golden parachutes" these people and the board of directors get for their failures., nah, we won't see a single report will we? <br /> <br />Thank You. <br /> <br />ps-Employees, you did the best you could, considering the circumstances. Good Luck.

[jjwwff]

I haven't been back since I tried to buy a usb cord (the same kind every mfg. gives away with your electronic purchase) when I realized I had left mine at home. They wanted $29. I went down the street to Wal-mart and got one for $3.

[lobo65]

Add me to the list of those who don't buy from Circuit City any more. It's like pulling teeth to get anyone to help me when I go. On the rare occasions that someone did offer I usually knew more about the product than they did. Amazon, Crutchfield, Newegg, and J&#38;R Music get my business now.

[the_iceman]

I dont mind really, close the 2 stores down in my area... the pushy sales people annoy me with their "you finding everything alright" or "you doing alright" coached lines. If I need help, trust me, I'll find you! I've had bad experiences there with different prices on their own web site and in their stores for the same item and when they refused to match Fry's prices, even though for me its a local competitor-both of which wasted my time. So, I'll buy from Frys, Best Buy, Amazon, Newegg, Butterfly photo, and crutchfield instead.<br />Happy Trails CC

[jfienix]

That sucks WalMart is killing all small and large busineses, thats why I buy my stuff online at WadeWire.com or other sites better deals anyway, and beside Curcuit City had bad commercials.

[1kingsfan]

Hey "Iceman" have you been into a Best Buy lately? Those "coached lines" are used by retailers all over the place! The fact of the matter is most people are completely dissatisfied either way. If I go up and greet you in a timely manner and ask if I can help you find anything you think I'm "preying on you". When I back off most consumers tell "HORROR" stories about how employees are impossible to find.<br /><br />I'm sure you've had these terrible experiences everywhere you've been. What always makes me laugh is that there is a Frys just down the road from where my CC is. I ALWAYS match Frys prices on every single item a customer asks me to. What's funny is that customers CLEARLY want Frys prices but don't want to deal with the hassle of their so-called "customer service" or their return policy. Soooo good luck if CC closes....Frys has the worst customer service I've ever seen....and when prices go up I'm sure I'll be seeing other unwarranted comments from you about how prices are too high...