Circuit City To Close All Stores Circuit City Stores, a bellwether American retailer, said Friday that it would go out of business, stripping the nation of its second-largest consumer electronics chain. The company, which filed for bankruptcy protection in November but had hoped to emerge in a slimmed-down form, said instead that it would liquidate all its stores and assets. Most of the chain’s 34,000 store employees will be laid off. Closing sales will begin as early as Saturday and will last until the merchandise is gone or about the end of March. Just last week, Circuit City, with 567 stores, was in talks with two potential buyers, but it was unable to reach an agreement with its creditors and lenders. “We are extremely disappointed by this outcome,” said James A. Marcum, acting president and chief executive of Circuit City Stores. He called the liquidation “the only possible path” for the 60-year-old company. The demise of Circuit City, while not surprising given its declining sales, is part of a radical shift taking place in retailing. Weak chains — unable to weather the freeze-up in consumer spending and choked by tight credit markets — are closing. The downturn comes after years of growth, when retailers — responding to a flood of demand from consumers spending borrowed money — opened thousands of stores. Now that the housing downturn and economic crisis have turned off the credit spigot and sent frightened consumers into hiding, it is becoming evident that many of those stores are not needed. “We are incredibly over-stored in many sectors,” said Stacey Widlitz, an analyst with Pali Research. “If you don’t have the balance sheet to really weather the storm for a couple of years, then that’s it.” Last year, a raft of retailers, including Boscov’s, Sharper Image, Mervyns, Linens ’n Things, Whitehall Jewelers and Steve & Barry’s, filed for bankruptcy protection. This week, Goody’s Family Clothing and Gottschalks also filed. Many more retailers are expected to follow suit as they run out of working capital or are unable to refinance their debt. Emerging from bankruptcy is harder than ever because of changes in the bankruptcy code and trouble in the credit markets, which are largely refusing to put new money into troubled companies. Wall Street analysts said in November that the prospects of long-term survival for Circuit City were bleak. Months of declining sales sent the company over the edge, although its problems go back a decade. They include buying cheap real estate leases in inferior locations and laying off the company’s most experienced sales staff. The latter saved money, but at the price of employee morale and countless customers. “They basically destroyed all their customer loyalty among all their best customers in one fell swoop,” said Britt Beemer, chief executive and founder of America’s Research Group. “That was really the beginning of the end.” The disappearance of the national chain means that in many markets consumers are running out of places to buy electronics, though shoppers are not the only ones being affected. The loss of Circuit City will probably be felt throughout the supply line as electronics manufacturers find themselves less able to negotiate prices. The biggest electronics retailer left is Best Buy. Circuit City’s liquidation sales are likely to put pressure on Best Buy in the short run, but retailing analysts say the company will ultimately emerge with more market share. “Even accounting for a softer economy,” said David A. Schick, an analyst at Stifel Nicolaus, “the business will go to specialty players in the sector and it will also go to mass merchant discounters.” Analysts say they believe the biggest winner will not be Best Buy, but Wal-Mart. Ms. Widlitz said consumers who shopped at Circuit City were more likely to defect to Wal-Mart than to Best Buy, especially at a time when Wal-Mart has aggressively built up its stable of name-brand electronics at low prices. “This is perfect timing for them,” Ms. Widlitz said. -------------------------------------------------------------------------- Another large retailer bites the dust. Who's next???????
http://tech.yahoo.com/blogs/patterson/33343 The troubled 60-year-old electronics chain tried its best to survive bankruptcy, but to no avail; now, it will liquidate its merchandise and close all 567 remaining stores.Bloomberg reports that Circuit City Stores Inc. has hired a quartet of liquidators to sell off its existing merchandise, pending a green light from the courts. If everything goes according to plan, the fire sale will start Saturday and continue through the end of March, according to CNNMoney.com. And unfortunately for Circuit City's 30,000+ employees, unemployment awaits. The biggest consumer tech chain in the U.S. besides Best Buy, Circuit City filed for bankruptcy protection back in November. As Bloomberg notes, the struggling company had been looking for a buyer as late as Thursday, but failed to find any takers. Of course, news of the Circuit City liquidation sale will draw plenty of bargain hunters, but (as I've blogged before), buyer beware. Typically, closeout sales are final: no refunds or exchanges, so think twice before snapping up a big-ticket item like an HDTV. Also, keep in mind that closeout prices often aren't as rock-bottom low as you'd think; make sure to comparison shop online, and don't be fooled by big "75% OFF!" signs on items that have been marked up. Finally ... a deep bow to Circuit City in general, where I've spent countless hours of browsing (and drooling)—and if nothing else, when it comes to tech retailers, less competition is never a good thing. Update: Many of you are wondering what happens to the extended warranties you bought from Circuit City. I have an e-mail in to Circuit City's public relations department and will let you know as soon as I hear back. In the meantime, here's some general info straight from the Better Business Bureau: The validity of any outstanding warranties varies for each bankruptcy. If a retailer goes out of business, the consumer may be able to rely on the manufacturer’s warranty. If a manufacturer goes out of business, the consumer may be able to rely on any warranties provided by the retailer. Many extended warranties and service plans are provided and administered by third parties and are typically not affected by a retailer or manufacturer going bust. So ... potentially good news. Anyone out there have their Circuit City extended warranty paperwork handy? If so, let us know the details.
The warranty for our projection big screen purcahsed through is adminstered through a third party and the actual work seems to be contracted to different companies. The two calls concerning a circuit board going our was handled by two spearate local companies. The same for the basic and extended warranty for appliances we purchased through Lowes and Home Depot.
Okay, so if I go online to Circuit City it has the long statement about closing stores in America and all. It states that the sales begin today and will last through March. My problem, every time I try to look online for items at Circuit City to see prices, in particular an iTouch, it takes me back to the same statement and shows no merchandise. Anyone know if we can purchase over the internet or does one have to go to a store? If someone finds a link to purchase please post it. Thanks, Sherry P.S. Here's the link I get: http://www.circuitcity.com/closed.html
Well, dang. I could help them restructure for less than $895 per hour. I hope all works out. Thanks, Sherry
