Bye Bye, Circuit City

[clj2]

http://money.cnn.com/2009/01/16/news...ion=2009011612

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."

Sad. I have a feeling that many, many more retail stores like this will have the same fate in 2009.

[catlover79]

What a shame - I really liked Circuit City, too.

[Chelsea]

Originally Posted by 60s70s80stvfan

Sad. I have a feeling that many, many more retail stores like this will have the same fate in 2009.

In Circuit City's case, though, the reasons behind the store's failure are at best minimally tied to the economy. The company has made a ridiculous number of managerial decisions in the last decade which at the end of the day killed it.

[HuntingtonM15]

Originally Posted by Seth

In Circuit City's case, though, the reasons behind the store's failure are at best minimally tied to the economy. The company has made a ridiculous number of managerial decisions in the last decade which at the end of the day killed it.

I had no clue until I just took a quick look at their income statement. Wow, they have been significantly going down year by year. The economy definitely isn't the main cause of their bankruptcy.

[Mikado]

I wonder how that will affect the (former Radio Shack) Circuit City stores here in Canada

[browneyes106]

My cousin used to work for Circuit City but he lost his job a couple of years ago when the financial problems started to really hit them. Back then he said he wouldn't be surprised if Circuit City went out of business. I do feel for the people who just the jobs now.

[Chelsea]

Originally Posted by Mikado

I wonder how that will affect the (former Radio Shack) Circuit City stores here in Canada

According to the articles I've seen, the Canadian arm of Circuit City should remain in business with most stores still operating.

[GARFIELDKOOL]

Ironically, I was at Circuit City this evening, and they didn't look very organized. I needed some assistance, and the employees were scarce and not very helpful. I am going to miss Circuit City. I prefer them over Best Buy because their new releases are cheaper.

[TeeVeeCloset]

Sorry but this one they deserve...about a year ago, I was looking for a DVD, after practically begging to find a floor walker, she looked it up in the computer and told me they had 2....then told me she could not help me find it because the stuff is randomly placed and not in alphabetical order...I HIT THE CEILING, it was one of those days...demanded to see a manager, explained I was the customer who buys DVD's and they sell DVD's and their employee refused to help me look for it!!! The manager didn't really give me much comfort, which made the situation worse...I then said the following quote..."Within a year Circuit City will go the way of sam goody, suncoast, & tower records"......I walked out of the Paramus NJ store and never went back.......absolute true story with no embellishment!

[robyrob]

our local Circuit City closed down over two years ago, i don't even know where the next closest one is and I probably haven't been into one of their stores in 5 years.

[catlover79]

Originally Posted by browneyes106

My cousin used to work for Circuit City but he lost his job a couple of years ago when the financial problems started to really hit them. Back then he said he wouldn't be surprised if Circuit City went out of business. I do feel for the people who just the jobs now.

So do I.

[Lee]

The Steve & Barry's chain is in the process of closing all its stores, too. The
location at the Grand Central Mall in Vienna, West Virginia, closed on
September 24th of last year.

[MrCleveland]

I believe it's a victim to Wall-Mart!

[OH Nuts!]

I had some good experiences (here and there) @ CC so I will miss them.

[JulieSomoski]

I don't know about everyone else, but when I've gone to Circuit City lately, the store's been a mess - things all over the place, no organization, and no help. You could only expect they were going out of business sooner or later. Now I'm just hoping this means some HUGE going-out-of-business sales