Circuit City to close 567 remaining US stores

jT · Post by jT » Fri Jan 16, 2009 5:06 pm

http://news.yahoo.com/s/ap/20090116/ap_ ... bankruptcy

Bankrupt Circuit City Stores Inc., unable to work out a sale of the company, said Friday it will go out of business — closing its 567 U.S. stores and cutting 30,000 jobs.

The nation's second-biggest consumer electronics retailer is the latest casualty of an unprecedented pullback in consumer spending that has driven other brands such as KB Toys, Mervyns LLC and Linens 'N Things into bankruptcy. Experts believe there will be more to come.

"This is the only possible path for our company," Circuit City's acting Chief Executive James A. Marcum said in a statement. "We are extremely disappointed by this outcome."

The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable. Negotiations for an acquisition went past midnight on Thursday, Circuit City lawyer Gregg Galardi said in court.

Two buyers — Mexican billionaire Ricardo Salinas Pliego, who controls a chain of electronics stores in Latin America, and the Golden Gate Capital private equity firm — had been looking to buy the company in a shrunken form, with either 350 stores or as few as 180 stores. But the company couldn't secure the necessary financing or support from vendors.

Some employees were notified Friday that they would lose their jobs and certain stores would begin close-out sales as early as Saturday.

U.S. Bankruptcy Judge Kevin Huennekens gave final approval to the liquidation plan.

"This is a very sad day for management, the employees, customers and the community," the judge said.

Shareholders are likely to receive nothing, as is typical in bankruptcy cases. Circuit City said in court papers it has appointed Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC as liquidators. They will pay a 70.5 percent return on merchandise.

It was unclear what would happen to the company's 765 retail stores and dealer outlets in Canada. Galardi told a judge there are still bids for the Canadian business.

"Very, very sad," said Alan L. Wurtzel, the son of company founder Samuel S. Wurtzel, and the chief executive from 1972 to 1986, board chairman from 1986 to 1994 and vice chairman until 2001. "I feel particularly badly for the people are employed or until recently were employed."

Wurtzel has previously said Circuit City didn't take the threat of rival Best Buy Co. seriously enough and, at some points, were too focused on making a profit in the short term instead of building long-term value.

Credit Suisse analyst Gary Balter told investors that Circuit City's demise will help Best Buy cement its position as the market leader.

"Losing Circuit (City) and what had previously been an $11 billion business, in addition to share gains from other smaller outlets, should help to partially offset weaker consumer spending as well as further secure Best Buy's position as the leader in the space," he said.

Shares of Best Buy Co. rose $2.44, or nearly 9 percent, to $29.58 in afternoon trading.

The liquidation of Circuit City follows the worst holiday shopping season in four decades. People have slashed their spending since the financial meltdown in September as they worry about their job security and declining retirement funds.

KB Toys filed for bankruptcy in December and is liquidating stores. Department store chains Goody's Family Clothing and Gottschalks Inc. both filed for bankruptcy this week — Goody's plans to liquidate, while Gottschalks hopes to reorganize. Industry experts expect more bad news in the coming months as spending likely will deteriorate further.

The Circuit City move will also hurt the nation's malls, which have suffered from the rise in vacancies as other chains have liquidated. But analysts say that the demise of Circuit City, whose stores range in size from 20,000 to 25,000 square feet, will hurt the fortunes of mall operators even more.

"It will bring to market a glut of big box spaces across the country," said John Bemis, head of Jones Lang LaSalle Inc.'s retail leasing team. "It will have one of the largest impacts on big box real estate across the country."

Circuit City filed for Chapter 11 in November as vendors started to restrict the flow of merchandise ahead of the busy holiday shopping season. It had been exploring its options since May, when it opened its books to Blockbuster Inc. The Dallas-based movie-rental chain made a takeover bid of more than $1 billion with plans to create a chain to sell electronic gadgets and rent movies and games. Blockbuster withdrew the bid in July.

Circuit City, which said it had $3.4 billion in assets and $2.32 billion in liabilities as of Aug. 31, said in its initial filings that it planned to emerge from court protection in the first half of this year.

Under court protection, it broke 150 leases at locations where it no longer operates stores and closed 155 stores in the U.S. in November and December.

Danteneon · Post by **Danteneon** » Fri Jan 16, 2009 5:19 pm

Yep. The store here in Manassas had a store closing sale around Christmas. I got some very good deals

Now the store is selling all the fixtures and displays.

contagious18 · Post by **contagious18** » Fri Jan 16, 2009 8:59 pm

so far they havnt had sales like that here. im waitin so i can jump on deals

Nutmeg · Post by **Nutmeg** » Fri Jan 16, 2009 9:12 pm

I just heard this on the news.

MoxHair · Post by **MoxHair** » Fri Jan 16, 2009 11:39 pm

On a more serious note, I feel for the 30,000 employees that are losing their jobs. Especially in this down turned economy. I wouldn't wish that on anyone.

However, I do not feel bad for the company as a whole. They refused to change and plan for the future, They didn't take Best Buy seriously when we were on the up and coming, They laid off their best employees and replaced them with less knowledgeable ones, They built stores in bad locations, Etc. There are many reasons why they only grew their business by 3billion dollars in the same time Best Buy grew from a 1 billion dollar company to a 40 billion dollar company.

Farewell to Circuit City. The Competition will be missed

11 Billion dollars of Consumer Electronics business is now up for Grabs. Who will make the move to capitalize on it

jetas · Post by **jetas** » Sat Jan 17, 2009 12:53 am

contagious18 wrote:so far they havnt had sales like that here. im waitin so i can jump on deals

Midnight_Rider · Post by **Midnight_Rider** » Sat Jan 17, 2009 1:28 am

I haven't shopped there in years (I think the last thing that I bought at a Circuit City was my RCA television back in the 90's). The main thing that I have looked for in stores like Circuit City and Best Buy are CD's and even Best Buy doesn't have much to hold my attention these days (find myself using the Collector's Choice Music magazine and amazon more often than not lately). Too bad that the economic times probably prevented a company like HMV in Canada to use this opportunity for a possible US foothold.

The employees will be in my

.

Fuzzyneon · Post by **Fuzzyneon** » Mon Jan 26, 2009 11:32 pm

good bye job fuck worked there for 2 and a half years as a supervisor ive applied for numerious other jobs and have come out with nothing they all say (where just not hiring) this is gonna be rough
thanks mox and yeah as a company we where fucking tard for the whole planning thing.

GreeNeons03 · Post by **GreeNeons03** » Mon Jan 26, 2009 11:48 pm

So far the "deals" have not been appealing to me. Only 10% off the good stuff, 20% of DVD's and Blu-rays, and 30% off crappy stuff I didn't even know they had.

rOniN · Post by **rOniN** » Mon Jan 26, 2009 11:54 pm

yeah they were closing the one in West Lafayette, IN a few months ago. All they do is jack up the prices and slap a discount tag on it. No good deals were ever there even at the very last of the stuff.

Well that damn extended warranty I got for my tv is going down the drain!

jrumann59 · Post by **jrumann59** » Mon Jan 26, 2009 11:58 pm

Well they aren't closing the Canadian stores YET.

Post by **Diablo0** » Tue Jan 27, 2009 12:03 am

I picked up about 10 CDs since they announced the closer. I asked the guy at the check out when he found out about it. He said he didn't know abut it until he saw it on the news that morning.

Either way this sucks... now I have an even smaller selection of stores to go to for any replacement computer parts in the area. There's Best Buy, Staples, Office Depot, an Office Max along with this little shop that doesn't have much. I wish they'd open a Microcenter here

Xtian · Post by **Xtian** » Tue Jan 27, 2009 1:33 am

Wal-Mart will take over the world

jT · Post by jT » Tue Jan 27, 2009 4:19 am

rOniN wrote: Well that damn extended warranty I got for my tv is going down the drain!

the warranties are carried out by a third party insurance company not associated with circuit city, so the coverage policy is still good

Fuzzyneon · Post by **Fuzzyneon** » Tue Jan 27, 2009 8:00 am

jT wrote:
rOniN wrote: Well that damn extended warranty I got for my tv is going down the drain!
the warranties are carried out by a third party insurance company not associated with circuit city, so the coverage policy is still good

yeah its assurent still use the same number to call from the service plan paper workif you dont have it pm me ill send you the number

latief · Post by **latief** » Tue Jan 27, 2009 9:38 am

http://www.hardocp.com/news.html?news=M ... FzdCwsLDE=

FYI

Fuzzyneon · Post by **Fuzzyneon** » Tue Jan 27, 2009 10:41 am

yes everything is back to retail value (whatever regulart price is) then taking a percentage off mostly not near the sale price. this is how liquidaters make money and weve accually went through a bit of product at these shitty discounts its really sad. people see liquidaton and buy everything for alot more then other retailers not even the web.

GreeNeons03 · Post by **GreeNeons03** » Tue Jan 27, 2009 10:49 am

People think their getting a deal because it's a liquidation sale.

They were having a liquidation sale at the local fairgrounds were they had laptops for $150 and desktops for $100 as well as some other electronics and clothes and such for awesome prices. The catch is you have to pay $15 for parking an $80 to get in. I didn't bother going after hearing that.

lilnicko11 · Post by **lilnicko11** » Tue Jan 27, 2009 12:41 pm

i heard about this but have never shopped at a circuit city. none of them around where i live. only best buys. how do they compare to best buy? that sucks for them tho....

GreeNeons03 · Post by **GreeNeons03** » Tue Jan 27, 2009 1:11 pm

Best Buy is alot better IMO. Especially since they have Rewards Zone.

rOniN · Post by **rOniN** » Tue Jan 27, 2009 2:59 pm

Fuzzyneon wrote:
jT wrote:
rOniN wrote: Well that damn extended warranty I got for my tv is going down the drain!
the warranties are carried out by a third party insurance company not associated with circuit city, so the coverage policy is still good
yeah its assurent still use the same number to call from the service plan paper workif you dont have it pm me ill send you the number

Sweet... I was hoping that was the case. I've still got the paperwork so I should be good to go. Thanks!

Fuzzyneon · Post by **Fuzzyneon** » Tue Jan 27, 2009 5:04 pm

rOniN wrote:
Fuzzyneon wrote:
jT wrote: the warranties are carried out by a third party insurance company not associated with circuit city, so the coverage policy is still good
yeah its assurent still use the same number to call from the service plan paper workif you dont have it pm me ill send you the number
Sweet... I was hoping that was the case. I've still got the paperwork so I should be good to go. Thanks!

np any questions you guys have about purchased items ill help as much as i can i feel bad for our loyal customers and people that prefer us over other retailers i felt the same way when compusa went under. and just remember certian stores sucked youll always have a bestbuy or walmart you shop at and go "i hate this bblablablab" ive shopped at 2 bestbuys in my area and one is exclent the other is terrible. well ive babbled enough hit me up if you have questions about items purchased or need warrenty info ill do my best to help out!

MoxHair · Post by **MoxHair** » Tue Jan 27, 2009 5:47 pm

Fuzzyneon wrote: np any questions you guys have about purchased items ill help as much as i can i feel bad for our loyal customers and people that prefer us over other retailers i felt the same way when compusa went under. and just remember certian stores sucked youll always have a bestbuy or walmart you shop at and go "i hate this bblablablab" ive shopped at 2 bestbuys in my area and one is exclent the other is terrible. well ive babbled enough hit me up if you have questions about items purchased or need warrenty info ill do my best to help out!

We have 5 BBYs in SWFLA. 3 are good.. 2 are eh..

With retail each store is going to be different, and it starts with the management staff.

lilnicko11 wrote:i heard about this but have never shopped at a circuit city. none of them around where i live. only best buys. how do they compare to best buy? that sucks for them tho....

no offense to the Circuit crowd..

but

They don't compare.

Fuzzyneon · Post by **Fuzzyneon** » Tue Jan 27, 2009 7:22 pm

MoxHair wrote:
Fuzzyneon wrote: np any questions you guys have about purchased items ill help as much as i can i feel bad for our loyal customers and people that prefer us over other retailers i felt the same way when compusa went under. and just remember certian stores sucked youll always have a bestbuy or walmart you shop at and go "i hate this bblablablab" ive shopped at 2 bestbuys in my area and one is exclent the other is terrible. well ive babbled enough hit me up if you have questions about items purchased or need warrenty info ill do my best to help out!
We have 5 BBYs in SWFLA. 3 are good.. 2 are eh..

With retail each store is going to be different, and it starts with the management staff.

lilnicko11 wrote:i heard about this but have never shopped at a circuit city. none of them around where i live. only best buys. how do they compare to best buy? that sucks for them tho....
no offense to the Circuit crowd..

but

They don't compare.

i am a much bigger fan of best buys selection of gaming stuff movies ect even there overall store look(lol guess ill be applying there as well)

ragek23 · Post by **ragek23** » Tue Jan 27, 2009 7:52 pm

The circuit city in my town that is closing just opened up its doors last November, what a waste.

My co-worker stopped in to see what was 30% off as the sign said 30% off sale. And aparently it was just a lead on. The only thing in the store that was on sale was candy and the employees said they would put another item on sale each week!!!

what total BS

lilnicko11 · Post by **lilnicko11** » Tue Jan 27, 2009 9:51 pm

yeah that does sound kid of stingy

MoxHair · Post by **MoxHair** » Tue Jan 27, 2009 10:02 pm

Fuzzyneon wrote: i am a much bigger fan of best buys selection of gaming stuff movies ect even there overall store look(lol guess ill be applying there as well)

Wish I had some good news for you.. But we're on a hiring freeze until at least March.

GreeNeons03 · Post by **GreeNeons03** » Tue Jan 27, 2009 10:14 pm

The Best Buy near my house is nice, I'm in there all the time. The security guys know me every time I walk in. So do some of the cashiers.

I love Best Buy's Rewards Zone program. I spend way too much money there so I got upgraded to "Premier Silver" Not exactly sure what all it includes, but I know I can now bank points. I'm saving my point up to get enough Rewards Zone certificates to get a nice discount on a HP Mini Netbook.

Post by **Diablo0** » Tue Jan 27, 2009 10:24 pm

Mox... question for ya

My rewards account, I don't carry my card since I don't like my wallet any larger than it has to be. When I get to the counter for checkout I just give them my phone number to pull it up. The problem is I have to give them my old phone from the house we were in back in Cincinnati that is no longer good.

I've been trying to change it to my cell phone but no matter what, it never updates. If I do it in the store they say it'll update from then on, I just hit Incorrect on the Credit Card swipe unit and then go through with the info change. I've done that more times than I can count with no luck. I've done it online at the rewards website... still nothing. I've called and spoken to the rep and she changes but alas whenever I go to the store it's still not updated with my cell phone number and I still have to use the number thats no longer good. Your thoughts oh Best Buy guru?

Fuzzyneon · Post by **Fuzzyneon** » Tue Jan 27, 2009 10:24 pm

MoxHair wrote:
Fuzzyneon wrote: i am a much bigger fan of best buys selection of gaming stuff movies ect even there overall store look(lol guess ill be applying there as well)
Wish I had some good news for you.. But we're on a hiring freeze until at least March.

yeah been reading that just talked to a store director over there i know ugh this job market sucks.

also the sales are different for certain stores depending on the liquidator running those stores its one liquidation company but the managers for them all seem to have different plans