Last days of Circuit City: Lousy bargains, rumpled salespeople
It's a sad state of affairs at Circuit City.
(Credit: CNET Networks)I remember when "liquidation" meant something. There was a small electronics store in my area that was closing down a few years back. Signs all over read "Liquidation Sale." In the store, I found prices slashed considerably. Some good stuff was 75 percent off. It was a fire sale, and it was fantastic. That was a going-out-of-business sale done right. What Circuit City is doing now, though, I don't get.
The company is shutting down, as we all know. But I was still shocked when I went into Circuit City this past weekend and found a store that was a shadow of its former self. The signature red shirts on employees were ditched in favor of jeans and sweatshirts; DVD sales racks that were once barely browsed were overrun by customers who couldn't help but dive in to the store's 50 percent off DVD sale. But the real bargains that Circuit City claimed we all would love weren't so sexy after all.
I need a new HDTV. Usually, I buy my HDTVs from Amazon.com because I've found it has the best prices and delivery service. But since I knew Circuit City was going out of business, I decided to make a trek down there to see if there were any hidden gems at a good price. Signs said the TVs were 30 percent off, and when I looked around, I realized the inventory wasn't picked over, as I had feared. There were some nice Sony LCDs on the shelves, as well as Panasonic plasmas.
I was drawn to the Panasonic TH-58pz800u, which was on sale for approximately $2,600 at the store. I own the 50-inch model of that plasma and couldn't be more pleased with its quality. So when I saw it offered at such a discount, the wheels started turning and I was thinking about how I was going to be able to fit it into the back of my SUV.
But then I checked Amazon's price. To my surprise, Amazon was offering the HDTV at an even more attractive price: $2,372.
So I decided to find one of the Circuit City salespeople to ask if they matched pricing that online companies were offering. I searched far and wide for their signature red shirt and could find just two people wearing it. Thinking the company must have laid off some staff, I went back to examining the HDTV, when a twenty-something guy dressed in a hoodie, baggy jeans, sneakers, and a crooked Mets hat walked over to me and asked if I needed help.
At first, I didn't realize he was an employee and I looked at him without saying anything. Then he told me that he works at Circuit City, he's just not required to wear his uniform anymore ("After all, am I gonna get fired?") and that's why I didn't recognize him as a salesperson.
So I asked him if the company matched pricing and showed him my iPhone, which was displaying Amazon's price of the same Panasonic plasma. His response was short and biting: "Nope. We don't do that anymore."
You don't do that anymore? How is it possible that a company that needs to liquidate its entire inventory won't sell a product to a customer for $200 less? It's a guaranteed sale!
Of course, explaining that to this salesperson would have fallen on deaf ears since he wasn't in a position to make any decisions and I don't think he would have cared if he could. He's there until the end of March--that's the deadline the employees have been given at this store--and after that, he's on to bigger and better things. Why should he care if Circuit City, a company that has laid him off, will be getting my money or not?
For comparison's sake, I went to Best Buy across the street to see if it had that same Panasonic plasma and to ask its salespeople if they would match the Amazon price.
After just a few minutes of browsing, a Best Buy salesperson in the signature blue shirt came up to me and asked if I needed help. When I asked her if they would match pricing, she said, "Absolutely." In no time, she asked her manager if they could match my price on the Panasonic HDTV and he came over to assure me that they could and the offer was on the table indefinitely--I didn't need to take it right that second if I didn't want it.
In spite of the Circuit City going-out-of-business sale across the street, the Best Buy was overrun with customers, the company's blue shirts were everywhere, and people were rushing to the checkout lines. Even in its dying days when it should be the price leader and the most willing to sell products, Circuit City still doesn't "get" it.
Under the guise of "Everything Must Go!" sales, Circuit City's liquidators are doing their best to feign value to squeeze every dime out of customers just one last time. Maybe it works (the company announced it has sold $1 billion in merchandise over the past month), but I still think it's a sad state of affairs. Circuit City is still a wrinkled mess. Meanwhile, Best Buy is as vital as ever.
Previously: Spying on the Circuit City liquidation sale.
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Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.
When they were closing the Linens and Things near me, I went twice and both times walked out without buying anything. Even when they had items supposedly marked 40% off, I could order from Amazon for basically the same price, no taxes, and have the ability to return it. Which would you choose?
As you stated, CC was asleep at the wheel and they continued it right into liquidation.
anyway, yeah it's stupid they didn't beat Amazon's price but that's their policy. eventually they will reduce the price somewhere between $0 and the amount to match Best Buy's price and someone will buy it.
and to answer the extended warranty questions you can always buy these, they are 3rd party companies anyway. if not, Squaretrade is the way to go.
Let me pose a question to the columnist- Has he ever tried to ask a healthy store to match the price of a deep discounted, throwaway priced product at a 'going out of business' competitor? I have. and the answer was, " We wont match, because the price they have it for is liquidation price, and not normal competition." Means, they wont budge their floor price and take a loss.
Find a product at circuit city that you feel is really at a huge discount, and walk in to Best Buy or other competitor in the area. see if they match.
Liquidation sale is a thought out process. And no, I am not in that or any other business related to BB or CC. I am just an average tech geek :)
Of course the idea of a liquidation isn't to just arbitrarily reward customers with deep discounts, but the liquidators should be trying to get as much money as possible for the creditors. If that means you sell a 2700 dollar TV for 2350 then thats what you do, a creditor should be happy to get an 87% return when the other option is really 0%.
Even if their sales are higher, so are their expenses.
You don't really understand the process. No one is talking about creditors taking TVs in lieu of cash. Normally what happens in a liquidation a firm that specializes in liquidating inventory is brought in. Usually these firms have fiduciary responsibility to the creditors as determined by the bankruptcy judge. These firm then determine the optimal way to wring as much cash as possible out of the inventory. In most cases they try to liquidate it on site because this often maximizes returns and minimizes expenses. However, there is a certain price floor they won't go below because the liquidator will be able to sell any remaining stock to a reseller - this may be Overstock.com, TJ Maxx, QVC, international distributors, and the like. Since these companies are willing to by X% of the retail price there is no reason for an in store liquidation to go below X+1%.
I'm actually stunned that the store was as empty of merchandise as it was because very little appeared to be bargain.
And the same held true of CompUSA when it went out of business. Liquidation is just a word; it means nothing any longer.
Used it last night and got me a ticket in NYC after it told me to make an illegal left turn. Circuit City Curse? I think so...
P.C. Richards.... two doors down from Circuit City? Route 17 Paramus?
And I'm not yet talented enough to pay attention to the road, the GPS and the street signs! I guess I trusted the stupid thing a little too much.
You are quite ignorant.
Wow- your life must really suck if you feel so self-righteous that you need to call someone a moron in this context. Your post just screams LOSER.
Take a look at Best Buy's web site. It says they do not honor internet only prices. To honor a price seen on Amazon.com there would have to be an actual store location in the same market that has the item in stock at that reduced price.
Back to CC. My local PA store had a Dyson vacuum at 10% off the original price with a note on the tag that said "Does not work". How's that for a bargain?
An additional note about price matching....from experience. I found out that many electronics store will price match a competitive store unless that store determines the amount they'll make off the sale is less than profitable. That's a no-brainer....but these stores that advertise price matching can't always match the price. The second thing I learned about Best Buy's price matching is that they are able to strike "deals" to get a sale but only if authorized by the maker of the product. And they can only go as low as the maker allows them. So recently I tried doing this while buying a Samsung TV with a friend. We both wanted to get the same TV so we asked if they'd knock $50 off the price for both if we bought one. We were turned down because of what the product maker authorized them to do and not do.
It isn't exactly fair, but honestly the people shopping now on a large basis are not OUR customers. The sad state of affairs you talk about should be that we're losing our jobs because people couldn't shop and buy the SAME things they are now at lower prices a few months earlier. We had a GPS selling for 99 bucks that went up to 200 dollars the minute the Liquidators came. You know how long it took for that to go back to the original sale price? Just this last thursday, an entire month later! We had about 10 of them left for that original price. You can figure how many people got robbed on that, and in the eyes of a lot of Circuit City employees they deserved to be.
I hope people enjoy trying to shop for a GPS at Walmart or buying a TV there I was just there the other night about to get a Garmin Nuvi 265T and on their website it was listed for 200$. In the store they had it listed at 280$. When I had asked the guy at the register (i refuse to call those guy's sales people) about the discrepency and if they'll match the price he goes "We don't match our own price". So I go to customer service and find a manager who explains to me that I could get that GPS shipped to the store at the 200 dollar price. But only if I sign up for the site to store express service at an annual fee of 30 dollars a year. I told him there's more honest ways to generate revenue, and I hope their electronics section gets shut down.
THAT'S something worth writing an article about. A healthy business ripping people off with the ol lower price on the website and higher price in the store routine. I ended up buying a Nuvi 260 at Best Buy, just because the only bull I got there was a pitch for a protection plan (which I naturally expected).
In any event I've learned the worst in people comes out during a liquidation. I really hope I never have to take part in that again, as it's temporarily ruined my ability to care about the customer. I'll continue to enjoy reading your articles, I just wish you'd have a firmer grip on this particular issue that I've had to personally deal with.
I do want to wish you and your former colleagues all the best in finding a new job soon.
However I do agree on the store matching their own internet price. This is a practice many large businesses engage in and is a poor customer service practice.
I'm truly sorry some of you lost your job but to blame CC demise on customers is ridiculous, when clearly the company has been improperly managed for decades; and to treat customers poorly b/c you only have a few more days of employment is of poor character. It is always up to you to rise above your circumstances and not lower yourself to the lowest common denominator.
The worst part of it all is.... Circuit City was selling the same products Best Buy and a 100 other retailers sold. The management of Circuit City just ran that place into the ground. I seem to remember a real bone-headed decision CC's management made a while back to cut the salaries of the highest paid sales people A LOT (commissions)... "They were making too much". Well duh!, they also sold the most... From what I understand, that was really the Big decision that started the companies downfall cause they lost their best salespeople and those that stayed were no longer motivated to sell.
No one faults you dude and what happened to you sucks... But Circuit City killed itself.
I wish at my store we were allowed to wear jeans and t-shirts- that red shirt is like a bullseye for people to ask where the DVD players and small televisions are (sold out weeks ago) and if the "now pay" price in televisions is the price before or after the 30% off (what don't people understand about the "was/now" system?) As it is I just wait for people to buy stuff and try not to leave the my register to answer any questions, especially "what's the difference between plasma and lcd?" No one in my television department will help you to your car or hook up a reciever to show you it's working, so please don't ask us anymore. If I get hurt loading a 50" plasma into your car on a rainy day, do you think CC will foot the bill?
So many customers think they have it all figured out, that it's "no wonder [I'm] losing [my] job!" but I did care before, and couldn't care less now. I'm not losing my job because of how I'm acting now, and there are no reprocussions for how I act now. So if you want good customer service, order something online and have fun trying to return it if it's broken or go into your beloved Best Buy and keep searching for the mythical blue shirt- I'm pretty sure that when you do find it it will most likely be more help then you can get across the street at CC (maybe).
The writer of this article deserved whatever hassle that he received buying his pointlessly large television. Instead of insisting that Circuit City doesn't get it maybe you should realize that it is you who doesn't get it. Liquidators set the policies and the prices from day one of the liquidation. Maybe if customers hadn't been such vultures since the first day you would have gotten your much lower price sooner.
As for the employees not wearing their uniforms I don't understand because we were required to wear them up to the last day.
No one writing in all of these comments would have appreciated the Circuit City employees going to their jobs before they knew they were to be fired and telling them "that's why you're losing your job."
Why do they do this if they can't get rid of it?
When companies die where do they place all the unsold items? To bank?
Other retailers buy up their stuff. If I am closing my store and I can get one of my former competitors to agree to buy anything left for 25% of MSRP or a certain fraction of the wholesale price than why would I sell that product to consumers for a greater discount? Selling it for less than what someone else will pay for it would be stupid.
You are pretty naive if you seriously believe that the only way that they can get rid of stuff is to fire sale it to consumers. Merely because you declare bankruptcy doesn't absolve you from trying to get creditors the best return on their investment.
Despite how lousy some of us consider Circuit City's sale prices to be, the checkout line at my local store still stretched for about 2/3 the length of the store.
http://www.cnet.com/circuit-city-liquidation-sale/
Bottom line: do some research. Some of the things they had may have been bargains, but the thing I wanted wasn't.
(I'll probably get a Nikon CoolPix P90 anyhow. It wasn't announced two weeks ago when this happened, but has been since.)
Unfortunately too many people see a commercial for a liquidation and imagine that they'll be getting a deal. They don't do their homework like finding out the real selling price of the item and are sucked in by percentage off an overinflated MSRP. It is sad to to see the throngs of ignorant folks standing in line ready to hand their hard earned money over to despicable liquidators.
The store nearest to me was physically located behind a HH Gregg store.
They were clueless from the start.
Wow, you sure made that point abundantly clear. I'm not so sure that you got who's the idiot quite right though.
How about educating yourself so you don't have to work crappy jobs? Has that ever occurred to you?
Do you really think people go to a store thinking "I really should buy something here to help these employees and their company out" ? Hell no! You go there to try and find the best price/customer service - which CC never had. Do you go to Burger King so you can support the high school drop-out working the register, or to get something cheap off the dollar menu?
I went to CC to buy a new TV a couple years ago and asked what the difference was between two models. The guy told me "this one has a blue light on the front." Really? No sh*t? This guy was clueless. I hope he wasn't making more than minimum wage.
That's fine you don't want to "deal" with customers anymore since the company is shutting down. If you want do act like an a55hole that's your own personal decision. But you will be 'judged' and labeled an a55hole based on how you act, not by how annoying these new customers are...
- by victorfairfellow February 23, 2009 7:47 PM PST
- You don't seem to realize that Circuit City is GONE! It's called going out tof business. They were bought be a company known as a liquidator. Many times liquidators will take away all licenses to adjust prices in the computer systems. This is exactly what happened to CCITY. Besides, if I were a liquidator, why would I still want to compete with Amazon? That is only going to lose ME money. So I make my money off of scare and fear factor advertizing. Liquidation and going out of business is a good way to get people in and locked on a sale. As for the higher prices. Many of you have not probably been in the retail business, but retailers do not like to sell a "naked" tv. The tv they sell is at a greatly reduced price. They make the money off of the huge mark-up on HDMI cables, accessories, and services. This makes up for the loss in the sale of the tv and profits a lot too!
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- by Shaun822 February 24, 2009 7:03 AM PST
- You had me almost hooked then you decided to throw politics into the mix like an idiot.
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- by dragontsd February 24, 2009 9:37 AM PST
- Circuit City's demise CANNOT be blamed on the consumer...to even propose that consumers are at fault, in part or in whole, is absolutely rediculous. CC was a business, if it goes under, there really are only a few parties who can possibly be to blame...(1) Corporate Management - it's their job to make the business successful/profitable and to safeguard stockholder's investements (2) CC Employees - I know it's harsh because you guys just lost your jobs...sorry...I'm not saying it's your fault, you're only one of the possibles. You arent helping matters now though, by pointing fingers out instead of up. (3) the people who bought you out and liquidated you - these people dont exist this time.
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- by pentest February 24, 2009 7:50 PM PST
- $160 HDMI cables?
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- by k-zon February 25, 2009 3:31 AM PST
- Ive spent Higher Money on Connection assortments and got the moneys worth out it, How that would make something fail i dont know unless it was that it was not an item worth the value, but if something like Connections are Worth a 160dollars a pop, and the TV arent really going down in price. I wouldnt Sell completely out either. All it seems to me is someone is trying to get great good quality products on the cheap cause they keep upgrading everytime something new comes out.....Even though thats cool and nice and all but after awhile its like....Theres gotta be something wrong. Besides even though they may not be carrying "the" latest stuff its still new, there gotta be upgrade options or something with the stuff if it keeps the retaining value. as for Amazon and such why it seems, to me at least why there prices are cheaper is the fact a one less person in the process or two per hour a week per product or something, im not no Economic Product Evaluation Manager or nothing but it does still seem that retail stores do offer some convience still for those who dont have a coomputer to get such services. Unless you know a friend, going to amazon or trusting public services would be more expensive then going retail if you went out and got a new computer, internet service, etc etc....if you dont have one.
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- by vmlenigma February 27, 2009 6:43 PM PST
- Idiot, it was George W. Bush's mess we are NOW in.
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- by sonnyg91 February 28, 2009 6:15 PM PST
- Ha...Ha....CC did better than BBY over the holidays. Link? Source? Proof?
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Showing 1 of 7 pages (218 Comments)So I may have bought a 52" SONY LCD XBR at 2999.99 from SONY. I'm going to sell it at 2499.99, get you Monster HDMI cables (159.99), blu-ray player (299.99) , and Firedog services (approx 200) and sell you the accidental protection plan (349.99) I just got about 160.00 profit there!
CCITY does not have time to fiddle around with that. They courts are closing the business by April 1st (funny).
Read the numbers! Circuit City did better than Best buy over the holidays! For some reason that was not good enough for HP Panasonic, and all of the other manufactuers who sell circuit city their products. THAT is the reason they are going out of business. It was not a lack of service, just a lack of sales in the past that caught up to them in a Democrat recession.
so really...corporate is to blame. stop blaming people shopping at your store, that's stupid.
Blaming Democrats is patently absurd, that's more of a response than that notion even deserves.
And you wonder why you failed and no one cares?
Cause how many people do you know that wont charge you to save money? :)
Idk, doesnt make no sense to me, i mean id like to have a nice Flat Screen too..But 20 different Models, 30 series, 4 different medians and 5 different compnay changings before i finally got my first one? Thats what alot people are probably saying who hasnt gotten one yet, either for lack of funds, purpose, or want.....or not.
I dont know what their debt is but a company stand point trying to retain as much Material as possible seems the best route for stack holders and employess cause even if they could at least just barely make whatever payment they need to make they can at least now say i got a Flat Screen TV with HDMI cables, and etc etc at a slight premium :) just not "resideul" income or profits or whatever, cause all previous investments would of been already on the end turn on returns from earliers product releases. Its all the new "stuff" that they dont quite have that would now be in the current or next return phase.
Otherwise its like stealing just not the whole value, just part value which then cause a non-returnable "income" that cant fill its purpose which cause another short fall in another form somewhere else which makes it to where they should of taken all of it but couldnt and they just didnt want what they had. So.....Prices probably wont come down for awhile. So HDMI cables at 160 bucks isnt unreasonable if its a Valued Product not a "Retunable" Product.
To me a "Returnable" Product is about the money, with that you can sell it at Liquidations for anything.....
And Returnable is not in defected product. Thats awhole other story.
Like i said, i dont know. Just spending my two cents. If what i said was right or not i dont know, but i know i got something right.
I HIGHLY doubt you guys did even as good as us over the holidays. My old CC (#3508) missed budget (~$350000) on black friday . My BBY (1427) hit and passed budget (~$550000) on the same day. Remeber how STUPID CC's commercials were over the holidays?
ANd the CEO of CC even complained of the crappy locations of all the stores...