Circuit City calls it quits, to liquidate assets
One-time Apple partner and the United States' second largest electronics retailer Circuit City will shutter all of its remaining stores following a difficult holiday shopping season and failed efforts to negotiate a sale that would have saved the company.
Just last week Circuit City*said*it was in "significant discussions, meetings, and negotiations" with "two highly motivated and interested parties".* The Best Buy rival, which was negotiating under immense pressure because its cash reserve was running dangerously short, said Friday it was unable to reach an agreement with those parties. Although Blockbuster made an unsolicited $1 billion bid back in*April 2008, Circuit City declined.
The Richmond-Va.-based company is now requesting approval from the bankruptcy court to liquidate all of its assets and close its remaining 567 U.S. stores.* It also operates 765 stores and outlets in Canada.* It's reported*that Circuit City is roughly $2 billion in debt, due in large part to its practice of buying inventory on credit and paying the sellers once it sold the merchandise.* The credit crunch and failing banks of last year robbed Circuit City of the good financing rates it depended on.
"We are extremely disappointed by this outcome," said acting chief executive James A. Marcum.* "The company has 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."
Circuit City's troubles came to a head in November when it announced*the closure of 155 stores and the beginning of its bankruptcy process.* The company said Friday it has not finalized plans to liquidate stores and other assets or decided the status of CircuitCity.com and its firedogSM service operation, meaning any extended warranties its customers purchased are now in question.
According to a statement, Circuit City "does not anticipate any value will remain from the ... estate."
Apple and Circuit City had a fragmented history together.* Circuit City once stocked Macintosh Performas until 1998, then the two*resurrected their relationship in 2000*to sell iMacs and iBooks in 600 Circuit City locations.* That program was cancelled a year later. *
After five more years passed and Mac OS X flourished, the companies*renewed attempts*to push Macs in Circuit City's locations in a 2006 pilot program at a handful of stores, only for Apple to*announce a year later*that it had decided to pull the plug.* Circuit City still sold iPods while Best Buy's partnership with Apple to also sell Macs*only got stronger.
One possible reason Circuit City has not announced the fate of its website is that CircuitCity.com is a $1 billion business,*according*to CNNMoney.* A chance remains that a creditor could acquire the company out of bankruptcy.* In such a scenario, Circuit City would follow the lead of*CompUSA, which drastically cut back its retail locations to just 23 in four states in order to focus on online sales in a partnership with TigerDirect. *As a final note of interest, one reason Apple reconsidered a partnership with Circuit City as an attractive option was the early 2007*demise of CompUSA.
As of press time, CircuitCity.com had been taken offline with a message telling customers to return in a few minutes when it will announce a series of special offers.
Just last week Circuit City*said*it was in "significant discussions, meetings, and negotiations" with "two highly motivated and interested parties".* The Best Buy rival, which was negotiating under immense pressure because its cash reserve was running dangerously short, said Friday it was unable to reach an agreement with those parties. Although Blockbuster made an unsolicited $1 billion bid back in*April 2008, Circuit City declined.
The Richmond-Va.-based company is now requesting approval from the bankruptcy court to liquidate all of its assets and close its remaining 567 U.S. stores.* It also operates 765 stores and outlets in Canada.* It's reported*that Circuit City is roughly $2 billion in debt, due in large part to its practice of buying inventory on credit and paying the sellers once it sold the merchandise.* The credit crunch and failing banks of last year robbed Circuit City of the good financing rates it depended on.
"We are extremely disappointed by this outcome," said acting chief executive James A. Marcum.* "The company has 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."
Circuit City's troubles came to a head in November when it announced*the closure of 155 stores and the beginning of its bankruptcy process.* The company said Friday it has not finalized plans to liquidate stores and other assets or decided the status of CircuitCity.com and its firedogSM service operation, meaning any extended warranties its customers purchased are now in question.
According to a statement, Circuit City "does not anticipate any value will remain from the ... estate."
Apple and Circuit City had a fragmented history together.* Circuit City once stocked Macintosh Performas until 1998, then the two*resurrected their relationship in 2000*to sell iMacs and iBooks in 600 Circuit City locations.* That program was cancelled a year later. *
After five more years passed and Mac OS X flourished, the companies*renewed attempts*to push Macs in Circuit City's locations in a 2006 pilot program at a handful of stores, only for Apple to*announce a year later*that it had decided to pull the plug.* Circuit City still sold iPods while Best Buy's partnership with Apple to also sell Macs*only got stronger.
One possible reason Circuit City has not announced the fate of its website is that CircuitCity.com is a $1 billion business,*according*to CNNMoney.* A chance remains that a creditor could acquire the company out of bankruptcy.* In such a scenario, Circuit City would follow the lead of*CompUSA, which drastically cut back its retail locations to just 23 in four states in order to focus on online sales in a partnership with TigerDirect. *As a final note of interest, one reason Apple reconsidered a partnership with Circuit City as an attractive option was the early 2007*demise of CompUSA.
As of press time, CircuitCity.com had been taken offline with a message telling customers to return in a few minutes when it will announce a series of special offers.
Comments
Circuit City is roughly $2 billion in debt, due in large part to its practice of buying inventory on credit and paying the sellers once it sold the merchandise.
Sounds like they used the business model of the US government.
Personally I hope that the management team ends up hungery and homeless. They simply represent the worst in American retailing.
Dave
Now if only Worst Buy (Best Buy) goes under too I will be completely overjoyed. Those fuuckers tried to sell me a $100 HDMI cable which I later got from amazon.com for $1 (ONE) dollar. Die, die, die.
LONG LIVE NEWEGG.COM!!!!!!!!
PS: I don't feel sorry for the employees who lost their jobs. They are better off doing anything else anyways.
Those fuuckers tried to sell me a $100 HDMI cable which I later got from amazon.com for $1 (ONE) dollar. Die, die, die.
PS: I don't feel sorry for the employees who lost their jobs. They are better off doing anything else anyways.
So because they offered you an item of paltry value, which you declined by exercising your free will, you would wish immense misery and suffering on 30,000 people and their familes?
Go read Grapes of Wrath by Steinbeck, you need a reminder of history.
I just hope they have some GREAT deals when the site comes back, cause its going to take 50% off or more for me to deal with those people...
Unfortunately what they will do is announce 25-50% off some mystical retail price that doesn't reflect the market value of the product. I've seen this at bankruptcies around here. They close the stores and run around jackng the sticker price up on everything and then open the door with a smile telling you everything is 25% off. The reality is you might save 2% over the cost of whatever two weeks ago. Frankly it is a bit of a joke if you are looking for a real bargain.
Dave
So because they offered you an item of paltry value, which you declined by exercising your free will, you would wish immense misery and suffering on 30,000 people and their familes?
Yes I would because these people made a choice to work for an unethical business and frankly should be held accountable. They had a choice to spend their lives hustling worthless extended warranties and grossly over priced cables.
Frankly this is no different than a guy lying down with a whore and then getting some sickness that spells a slow death. He made his bed and needs to lay in it, like wise these employees need to be held accountable for their actions.
Go read Grapes of Wrath by Steinbeck, you need a reminder of history.
There is nothing at all here that is even remotely comparable.
This is the ghost of DiVX come home to roost.
Honestly I forgot about that little bit of history, shame on me. This is even a bigger reason to take joy in this failure.
Dave
I feel sorry for those who lost their job..
...and the commercial landlords that lost a tenant.
Sounds like they used the business model of the US government.
I thought paying for goods as they were sold was a common practice.
I feel sorry for those who lost their job. As usual, the top management people consider this early retirement. The problem with Circuit City is that they cannot compete with Best Buy.
I really don't think they needed to compete directly against Best Buy. They were doing pretty well when they were offering competent, knowledgeable service in more comfortable surroundings. When those three eroded, there was little point to going there.
So because they offered you an item of paltry value, which you declined by exercising your free will, you would wish immense misery and suffering on 30,000 people and their familes?
The only reason they had employment was to take part in this form of hucksterism, especially when they say that the more expensive HDMI cable delivers better results than a less expensive one.
I have no problem with that, most CC employees that I've had the misfortunte of encountering in the later years were slackers anyway.
Go read Grapes of Wrath by Steinbeck, you need a reminder of history.
So what? That story was about people caught in circumstances they didn't necessarily create. CC employees in general were participating.
I thought paying for goods as they were sold was a common practice.
I really don't think they needed to compete directly against Best Buy. They were doing pretty well when they were offering competent, knowledgeable service in more comfortable surroundings. When those three eroded, there was little point to going there.
The only reason they had employment was to take part in this form of hucksterism, especially when they say that the more expensive HDMI cable delivers better results than a less expensive one.
I have no problem with that, most CC employees that I've had the misfortunte of encountering in the later years were slackers anyway.
So what? That story was about people caught in circumstances they didn't necessarily create. CC employees in general were participating.
I have to agree with what others have said, you're extremely overboard. You have the freewill to accept or deny any and all services offered to you. Retail stores operate on these wonderful things called profit margins (which is why those cables cost so much). Online retailers often suffice on much lower margins, which is why they make nowhere near the annual revenue. Business by its very nature is based on profit. In a free market, you can shop anywhere you want, be it in store or online. That creates this thing called competition that keeps prices (online or otherwise) from being exponentially higher than they are. So, again, you have several choices and many choose big box retailers. If you choose online, that's fine, but businesses have every right to maximize profit margins if they can. And quite honestly, wishing for thousands of people to lose their jobs in this economy just makes you kind of a dick. So, please, spare us all your brand of "ethics." Go somewhere else and get over yourself.
To the people who are glad to see these employees lose their jobs in an economy like this, you are complete jacka**es. I challenge you to spend one day on a sales floor in a place like Best Buy or Circuit City. We are not commission-based salesmen, so "pushing" anything on anybody is a waste of time. We have services and accessories available for those who want them. It is my job as a salesman to offer them, and your job as a consumer to decide if it's something you want or need. There is nothing unethical about that. If you find a problem with that, then you also have the choice to not come in. Most of you on this board probably don't need the things we offer, but you mother, grandmother, friend, co-worker, etc. might, and that's why we have them.
And also about the price, Halvri couldn't have put it any better. We as a company have a right to charge market value for our products. Best Buy (and all companies, for that matter) are in business to make money, not cut deals. You may be fine going to newegg.com and getting an "allegedly" authentic product for significantly cheaper, but I liken it a lot to eating out. Sure, you can go the grocery, get some sirloins and seasoning, and grill a steak yourself for a fraction of the price of going to Outback, but many people are willing to pay a premium for convenience and professional assistance (in this case, a chef for cooking, waitor for placesetting, etc., and a bus boy for cleaning), not to mention there being a good chance of getting a better cut of meat and things being done with better quality. How is this any different than the products, services and such we offer in our store? Just like you have the option of going to Outback or grilling a steak yourself, you have the option to either shop online or accept/decline our services, warranties, etc.
To the majority of you, sorry for the excessively long rant, but I just can't stand blatant arrogance and completely idiotic comments that could very well be highly offensive to someone reading these posts.
I have to agree with what others have said, you're extremely overboard. You have the freewill to accept or deny any and all services offered to you. Retail stores operate on these wonderful things called profit margins (which is why those cables cost so much). Online retailers often suffice on much lower margins, which is why they make nowhere near the annual revenue. Business by its very nature is based on profit. In a free market, you can shop anywhere you want, be it in store or online. That creates this thing called competition that keeps prices (online or otherwise) from being exponentially higher than they are. So, again, you have several choices and many choose big box retailers. If you choose online, that's fine, but businesses have every right to maximize profit margins if they can. And quite honestly, wishing for thousands of people to lose their jobs in this economy just makes you kind of a dick. So, please, spare us all your brand of "ethics." Go somewhere else and get over yourself.
I totally agree wit you.. well said..
Sure CC had issues but choices are still there and local resellers are still there after taking a beating, they just reduced overhead and kept fighting. I think that maybe the local independents can now try and succeed as someone is always there to fight and take on the big boys because sometimes the big boys slip and fall.
I feel sorry for those who lost their job. As usual, the top management people consider this early retirement. The problem with Circuit City is that they cannot compete with Best Buy.
It is very sad for the retail rank-and-file. It's not like Best Buy is that fantastic that Circuit City can't keep up?
Ah, memories of 2000-2002 in San Francisco. Nary an Apple Store to be seen, all your Apple and other tech & accessories needs taken care of by CompUSA and Circuit City. Less than a decade on, both epic failed.
Fry's is still kicking along, I take it?
After that when I tried to look for a job in London I was at Carphone Warehouse in UK for just one day, it was just rubbish.
The retail industry, from a human perspective, all I can say, is that it is very, very strange. In some cases, as an employee, you wonder why the management even wants humans around, the management seems like they'd be happier doing away with people altogether and just fix vending machines and looped videos at the retail stores to do all the selling.
Even my own brother had such a poor impression of retail sales, even though I tried to explain how good retail can actually work well and benefit both customer and salesperson.
Having been a former employee of Circuit City and current employee of Best Buy, the only shocking piece of information here is that it took this long. During my time at Circuit, I was always appalled at the way we were treated as employees (yelling at us in front of customers, horrible benefits, etc.). Having come over to Best Buy, not only can I sell Macs (WIN!), but we are treated MUCH better as employees and there truly is a level of respect between the employees and management in regards to our customers that I don't believe is understood.
To the people who are glad to see these employees lose their jobs in an economy like this, you are complete jacka**es. I challenge you to spend one day on a sales floor in a place like Best Buy or Circuit City. We are not commission-based salesmen, so "pushing" anything on anybody is a waste of time. We have services and accessories available for those who want them. It is my job as a salesman to offer them, and your job as a consumer to decide if it's something you want or need. There is nothing unethical about that. If you find a problem with that, then you also have the choice to not come in. Most of you on this board probably don't need the things we offer, but you mother, grandmother, friend, co-worker, etc. might, and that's why we have them.
And also about the price, Halvri couldn't have put it any better. We as a company have a right to charge market value for our products. Best Buy (and all companies, for that matter) are in business to make money, not cut deals. You may be fine going to newegg.com and getting an "allegedly" authentic product for significantly cheaper, but I liken it a lot to eating out. Sure, you can go the grocery, get some sirloins and seasoning, and grill a steak yourself for a fraction of the price of going to Outback, but many people are willing to pay a premium for convenience and professional assistance (in this case, a chef for cooking, waitor for placesetting, etc., and a bus boy for cleaning), not to mention there being a good chance of getting a better cut of meat and things being done with better quality. How is this any different than the products, services and such we offer in our store? Just like you have the option of going to Outback or grilling a steak yourself, you have the option to either shop online or accept/decline our services, warranties, etc.
To the majority of you, sorry for the excessively long rant, but I just can't stand blatant arrogance and completely idiotic comments that could very well be highly offensive to someone reading these posts.