Circuit City to shut down remaining stores
After exploring other options, Circuit City said Friday it will begin liquidating all remaining stores.
Circuit City calls it quits.
(Credit: Circuit City)About 30,000 employees face layoffs as the rest of its 567 stores are closed. The fates of outstanding warranties, its Firedog repair service, and Canadian stores are still to be determined, according to the company.
The nation's second-largest consumer electronics retailer filed for bankruptcy in November and initially closed 155 retail outlets in an attempt to get its roughly $2 billion debt under control. Just a week ago, Circuity City announced it was in talks for a sale with two "highly interested" parties. After the talks broke down, the company said, it had no choice but to liquidate all remaining merchandise and shut its doors.
"We are extremely disappointed by this outcome. The company had been in continuous negotiations regarding a going concern transaction. Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, 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," James Marcum, acting president and chief executive officer for Circuit City, said in a statement.
The disappointing, recession-weakened holiday season likely sealed the retailer's fate, although the real problems began before the economic downturn. The retailer had posted several huge losses late 2007 and early 2008, but the rash of bank failures in September and October proved disastrous for it.
The resulting global credit crunch hit Circuit City hard. The retailer buys TVs, stereos, laptops, and other gadgets on credit, usually at a good rate from vendors with the promise to pay them back once the company sells the goods in its stores. But as the company racked up huge losses, and credit became suddenly more expensive, vendors stopped giving Circuit City reasonable financing rates.
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur. E-mail Erica. 
Why are WE financing this supposed bailout if it's not helping a company like Circuit City to STAY in business? I doubt it's going to be any help adding another 30,000 people to the unemployment lines.
I have to say, I liked Circuit City. They struck me as having prices that were reasonable enough, I would go to their stores on many occasions versus purchasing online. They were that close. Maybe that was one of their weaknesses.
Charles Whealton
Of course, government corruption wouldn't be such a big deal if people hadn't voted to give them so much power.
I voted with my feet, and Crutchfield, Amazon, and to a lesser extent Best Buy gained my future business.
I almost always bought my parts and gear one of two ways: newegg/pricewatch.com if I didn't mind the wait, or from the local geek shop (that is, the local little computer shops) if I wanted to get some advice or didn't have the time/patience to wait for the part.
Unlike Circuit City (and come to think of it, Best Buy), I could always get hold of folks who knew *** they were talking about at the local geek shops. Also unlike CC/BB, I could get the parts at a very reasonable price. The geek shops are still around for the most part - you just have to go looking for them, but they're almost always worth the search. Even for non-techies, the local geek shop stands a better chance of rehabilitating your old and out-of-warranty desktop/laptop/whatever than the local Geek Squad/Firedog shop will (and at a decent price).
It's things like this that have klilled Circuit City, and eventually BestBuy...
Just wondering now what kind of deals they will have on some sweet stuff.
1. The liquidators are trying to make a profit! They'll mark prices up to retail and knock some off that (20%?), leaving the "liquidators price" still a little above the competition and above what the item sold for a few months ago.
2. Liquidators rarely go through the bother of becoming approved retailers for the products they carry, meaning the inventory they sell off is basically considered gray market. Manufacturer warranties can (and often do) become a question. In short, there may not be any warranty whatsoever.
BUYER BEWARE!
"Yes, customers holding Circuit City gift cards may redeem them at full value at our stores during the liquidation sales. Once the stores are closed and the company is out of business, the gift cards will have no value."
There is no reason you have to spend them immediately, but I would shop ASAP only in that the selection will get progressively worse, which may make it hard to spend all of the value on the gift cards particularly if you have a large amount locked into the cards. Depending upon your local locations the selection may already be a bit thin.
I like saving dollars as much as the next person, but for a brick and mortar store, Circuit City's prices didn't strike me as too high.
Charles Whealton
Countless times I've been in their stores where there's a growing queue at the checkout area with too few cashiers, and other employees will simply wander aimlessly by, oblivious to the customers who are more than willing to try to give justification to those jobs that these bozos hold.
Silo, Best, FutureShop, CompUSA, The GoodGuys and now Circuit City...the big shops seem to be consistent at showing how BAD their business model can adapt to a changing marketplace. Only Fry's and Best Buy is left around here...and neither is all that great at having decent everyday pricing.
"The fates of outstanding warranties, its Firedog repair service, and Canadian stores are still to be determined, according to the company"
"Currently, all Circuit City Advantage Protection Plans are fully backed by the Assurant Solutions companies. Assurant Solutions operates as Federal Warranty Service Corporation, Sureway, Inc., and United Service Protection, Inc. Assurant Solutions is part of Assurant, Inc. (NYSE: AIZ), and its extended service contacts are backed by an Assurant insurance subsidiary rated A "Excellent" by A.M. Best Co."
You would have to contact the warranty company about any warranty repairs. The only caveat is that getting warranty repairs through the warranty company may be more of a hassle then it was before CC went bankrupt. The moral of the story is that no matter how far fetched it may seem retail stores can and do go out of business.
If you are going to buy a warranty particularly a long term warranty I would suggest to buy it from the manufacturer. You tend to get superior quality service and the warranties ironically tend to be less expensive. Having worked in retail once upon a time I realize that the major argument that retail stores give is that you can bring it into the store, but the reality is that for the higher end items that you are most likely to buy a warranty (ie. computers, TVs, etc.) the store often can't fix it on site or they take so long to fix that you could have mailed it to the vendor's service depot and got it back in about the same amount of time.
What I'm wondering about is Firedog, their tech support & services division. If Circuit City is closing does that mean Firedog is also toast?
Any place where Best Buy is the only electronics retailer I wouldn't be surprised to see one of the smaller chains move into the area or the very least somebody start an independent chain provided that the market is big enough for more than one electronics store.
"In saying that accessories, services, and extended warranties are high profit items, Circuit City's CEO demonstrates that he is clueless as to why Circuit City is not seeing profits. Accessories, services, and extended warranties are LOW PROFIT ITEMS because potential and former Circuit City customers are shopping elsewhere to avoid having these items shoved down their throats. Now the CEO, himself, is indicating that Circuit City's throat-shoving is likely to increase. Think that's going to bring in more sales and make the company profitable, Mr. CEO? I DON'T THINK SO! GEEZ...HOW STUPID CAN YOU GET?"
Later, the CEO stepped down, and I posted a subsequent comment about what Circuit City needed to do to remain a viable entity. For around 35,000 Circuit City employees who are now facing unemployment, I think it would have been better if both of my suggestions had been implemented.
If you're a decent shopper, you'd take advantage of what the service plans offer in terms of part and eventual product replacement ($200 mp3 player + $30 = 1 mp3 player for 2 yrs and free upgrade afterwards).
To put the accessories, services, and extended warranties into a better perspective--it's like selling the item at hand at a higher price with some small terms the retailer will have to agree to--which later goes into the profitability of labor (which IS highly profitable) and adding to the bottom line.
sythara: No, it just goes to show that some people should *not* be talking about things they're clearly too ignorant to understand. Yet alone take your advice and go applying for those positions (unless you were talking to dragonsky1, in which case, would still be bad since this information isn't that hard to understand--people in those positions *should* already know this and be on a level far beyond that to be successful).
Your not speaking about the business world from a proper perspective your making it personal. You dont like having warranties, services, and accessories shoved in your face, but dont forget alot of other people are easily trick, or convinced into such items and some want or need them.
CC has been mismanaged for a while but pushing services, warranties, and accessories was not the strategy choice that doomed them.
What is really bad about this is that now a lot of people who live in smaller cities will only have BB and the mart for electronics. The lack of competition may lead to higher prices once the economy improves.
- by sythara January 16, 2009 1:00 PM PST
- For all those folks who are afraid that a monopoly will arise (wal-mart not counting), just remember that when the demand for product increases, more sources appear to satisfy it. We might be seeing CompUSA come back after the economy bounces back up.
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- by sunnytaz January 16, 2009 3:06 PM PST
- I feel for the employees losing their jobs. We quit purchasing from Circuit City years ago after a disastrous car alarm installation episode. Circuit City has absolutely the worst customer service. Even after contacting their corporate office they didn't bother to make it right so like many others we voted with our feet. Haven't been inside their door in over ten years. Ultimately when you do this to tens of thousands of customers it comes back to bite you. Bye bye Circuit City may you be replaced by another with better customer service standards.
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