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Years ago I worked at a Circuit City-like big-box retailer in Washington state called Future Shop. I was there through the bitter end when they shuttered the U.S. stores, and I worked through the liquidation. Toward the end there wasn't much left. Employees would hide things they wanted so they could get the larger discounts later in the sale, but for the most part we treated the customers well.

(Credit: CNET Networks)

Apparently not so at some Circuit Citys, like one near Boston. According to a local news channel, Gina Reis thought she was getting a good deal on a large-screen Samsung HDTV at $1,100. Signs posted at the store advised buyers not to open the merchandise, so she didn't. Signs also said all sales are final.

Spying on the Circuit City liquidation sale

When Gina got home she was shocked to find the screen shattered. Returning to the Circuit City, she was told the store wouldn't take the HDTV back but that it included a full manufacturer's warranty.

Warranties on Samsung HDTVs, of course, don't cover shattered screens.

There are state laws in Massachusetts that protect consumers against such purchases, but they're superseded by federal liquidation and bankruptcy laws that actually say all sales are final.

Thankfully, Reis' local TV station contacted her credit card company, Citizens Bank, which agreed to drop the charges. The moral of the story is that if you're looking for a great deal at your local closing Circuit City, it's buyer beware, and check your purchases.

Related story:

Last days of Circuit City: Lousy bargains, rumpled salespeople

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.

As if your company shutting right before the holidays weren't bad enough.

Regional electronics dealer Tweeter, scheduled to close its doors December 7, on Tuesday suddenly closed down all its stores. Six hundred employees at 70 stores were fired immediately. Many employees are still owed back pay, and some customers are still owed merchandise that has already been paid for, according to The Boston Globe, which cites five unnamed store managers and executives.

According to the Globe:

The employees, including roughly 150 in Massachusetts, are still owed at least one week's pay, vacation time, and hundreds of thousands of dollars in bonuses that were promised as part of the liquidation sale, said the managers and executives who declined to be named because they are still owed money. Customers are unable to pick up merchandise they had already purchased and the liquidators handling the closing also have not been paid. Meanwhile, there is roughly $14 million worth of goods left in the locked stores.

The Globe's sources say that while Tweeter's owner, Schultze Asset Management, paid off the company's largest creditor, Wells Fargo, it didn't want to continue covering the costs of shutting down the business. So Schultze locked the doors five days early and told managers not to come to work anymore.

Just a week after saying it was closing some stores to get its finances in order, Circuit City on Monday filed for bankruptcy protection. It will help keep creditors like Sony, Microsoft, Toshiba, and many others who have yet to receive payment for their products, at bay while Circuit City tries to get back on track. The company has also secured a $1.1 billion debtors' line of credit to keep stores open and pay its employees.

The timing, for a retailer, couldn't be worse. It's not exactly assuring that right as we're about to start holiday shopping one of the main places for consumer electronics gifts seems unstable. So what does this mean for consumers? Here are some important questions and answers about what Circuit City's current situation means for you.

Q: Does this mean less choice for places to shop for the holidays?
A: Actually, no. Circuit City will be open for business as usual. The company did announce last week that it would be closing 155 stores, which will go on as planned, but 566 of its stores will remain open. Whether they will be fully stocked is another question, but Circuit City says that its new line of credit will help keep its shelves full.

Q: Will there be any staff around to answer my questions?
A: Circuit City says it's reduced its support staff in district and regional roles, in addition to the positions eliminated at its stores currently being liquidated. Overall, there will be 20 percent fewer employees company-wide, but the retailer insists its stores will be well-staffed during the holidays.

While many retailers are understandably nervous about what this holiday will bring, none is likely more so than Circuit City.

Blockbuster rescinded an offer to buy the beleaguered chain earlier this year and its CEO stepped down in September. Its stock has been languishing below $1 for long enough that the company has been notified it could be delisted from the New York Stock Exchange. And now the company has been forced to close 155 stores right before the crucial holiday sales period because of the dearth of credit available in the market right now.

(Credit: Circuit City)

For all intents and purposes, it appears the nation's second-largest electronics retailer is on the verge of disaster. Even if this season's sales results end up not being as bleak as some are predicting, it's unlikely even that could save Circuit City at this point. Circuit City did not respond to a request for comment for this article.

Though Wall Street analysts who watch Circuit City closest aren't ready to go on record to go on a death watch for the electronics chain, suffice it to say, its pulse is getting weaker and things aren't looking good.

The global credit crunch is hurting Circuit City in particular. The retailer buys TVs, stereos, laptops, and other gadgets on credit, usually at a good rate from vendors with the promise to pay it back once the company sells the goods in its stores. But as the company has racked up huge losses, vendors are not giving Circuit City reasonable financing rates. Though Circuit City hasn't come out and said so, some vendors could be convinced altogether that the retailer flat out won't be able to pay the money back and could decline to send Circuit City any products at all. At that point, it becomes almost impossible for Circuit City to operate.

Because of this, the business model of Circuit City and other electronics retailers doesn't work without very fast growth. And sales of many of the big-ticket items like notebooks, flat-panel TVs, and even gaming consoles (it's the first year in awhile there won't be a hot, new, hard-to-get console), are tapering off.

No doubt, the slumping economy is causing some consumers to be more conservative about purchases this year. Consumers polled by the Consumer Electronics Association say they plan to spend $200 less this year than last on holiday items.

Add to that a fundamental shift in the way media is consumed--more online video and digital downloads, slowly moving away from packaged media and accompanying players--and the future of the electronics retail business doesn't look so bright. As prices drop, it gets harder to grow business. And without that growth, it's impossible for Circuit City to pay back those loans, much less suddenly become profitable, said one analyst who asked not to be quoted. ... Read more

(Credit: Crave Asia)

Wireless charging company Splashpower has gone out of business. In a press release, the U.K.-based firm said it unable to secure funding and is offering up the company for sale to interested parties.

About two months back, MWg announced it would be partnering with Splashpower to provide wireless charging for its products in the middle of this year. We contacted MWg to find out how this would affect its plans but, as expected, the company said it could not comment at this point as it is still discussing plans with Splashpower. We'll bring you more information as updates become available.

(Source: Crave Asia)