BREAKING NEWS: Circuit City to be liquidated, CNBC reports; 35,000 expected to lose jobs

[radfringe]

Source: MSNBC

Circuit City Stores Inc. said Friday it has agreed with liquidators to sell the merchandise in its 567 U.S. stores after failing to find a buyer or a refinancing deal.

The second-biggest electronics retailer in the nation says 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.

Calls to the Richmond, Va.-based company and the liquidators were not immediately returned.

Circuit City filed for Chapter 11 bankruptcy protection in November. U.S. Bankruptcy Judge Kevin Huennekens gave the company permission to liquidate if a buyout was not achieved.

Read more: http://www.msnbc.msn.com/id/28691963/

[hlthe2b]

1. Damn... however poorly managed CC was, this is NOT good

for employees or consumers alike. Damn....

[napi21]

2. Unfortunately, this is probably the first of many retailers to disappear.

People just don't have money to buy non-essential items.

[Name removed]

13. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[4_TN_TITANS]

19. Far from being the first...

Vacant strip malls are a dime a dozen here in TN. People with any extra to spend are hanging onto it for fear of the future.

[napi21]

24. I should have said "first of the new year". I know it isn't the first in

recent times. Thousands of small businesses are already gone, and a few large ones too.

Last night I was talking to the broker who manages my 401K rollover funds, and I told him I see the next BIG BUBBLE to burst is going to be the CC industry, and after that or maybe at tghe same time, the commercial RE market People lose their jobs and can't pay their bills and have no money to spend, stores close, mall owners can't rerent the space and can't pay their mtg. I hate to sound like such a pessimist, but I honestly don't see ANY bright spots in the future!

[superconnected]

48. Walking downtown Seattle two weeks ago I saw many signs that said - moved to the web.

Retail space is cheaper there. A lot of this has to do with the times changing as well as the economy changing.(or are they the same thing)

[rateyes]

3. Anybody who received gift cards over the holidays, etc.

need to use them before more buinesses go under. If you have a gift card from Circuit City, it's time to find a store while they are still open.

[bluestateguy]

4. I gave them thousands of dollars of my business over the years

2 desktops, satellite radio (and installation), an FM radio, DVD's, and other electronic gizmos too numerous to mention.

I bought a DVD from them a couple of weeks ago in the vain hopes that I could help them out.

[AlexDeLarge]

8. Sad but inevitable

I remember the first time I went into a Circuit City store. The way they handled the purchase of any item in their stores reminded me of the Soviet Union. Select the item, pay for it at the cashier, then go back and pick it up from the original station that you selected it at. It always struck me as being bass ackward. I was always surprised that they never changed that paradigm. I guess that with the Soviet Union gone, Circuit City will be too. Sorry for all those people who lost their job, but as someone noted earlier, there aren't too many people that are buying non-essential items any more and this may be a harbinger of thing to come.

[Imagevision]

5. Airlines, Motor Companies - this is getting deep!

[groundloop]

6. Somehow I imagine their board and CEO

won't be hurting.

IMHO they were poorly run, with prices that were higher than other stores. I checked out one of their "going out of business" sales before Christmas, the so called sale price wasn't any less than Best Buy and others. In any case I'm sure their upper management will be just fine while consumers and former employees suffer.

[4dsc]

17. Former Circuit City executive to get $1.8 million

The former top executive at Circuit City Stores Inc. will receive $1.8 million in a severance deal, according to documents filed late this afternoon with the Securities and Exchange Commission.

Philip J. Schoonover will receive his annual base salary and a target bonus for the current fiscal year, each worth $900,000, the filing shows.

Schoonover resigned Monday as chairman, president and chief executive officer of the Henrico County-based consumer electronics chain.

The 48-year-old Schoonover also will receive health and welfare benefit plan participation for two years, up to $50,000 in outplacement services and the acceleration of the vesting of his stock options and restricted stock awards that would have vested before Oct. 4.

From last year..

[redqueen]

25. And that's the last guy... I wonder how much the current execs are taking with them. (nt)

[Laf.La.Dem.]

7. You Fools

You fools why are you troubled - the economy is basically sound
:mad:

[closeupready]

9. We're just a bunch of whiners, I've heard.

n/t

[Tempest]

11. It's all mental

n/t

[Guaranteed]

55. Cheap electronics are GOOD for America!

What is everyone so upset about? ;)

[CatholicEdHead]

10. I guess my remaining 9mo extended warrenty is now worthless

on my Thinkpad. I could be a creditor but I am way down the list.

[Ms. Toad]

42. Maybe not.

Sometimes those are handled by a third party.

When CompUSA went under, their extended warranties were (at least theoretically) still honored. I understand the entity handling them was not as responsive has it had been when CompUSA was still in existence - but at least it was better than nothing.

(I had one under CompUSA - but it was an odd situation so I didn't try to enforce it. My laptop died during the initial manufacturer's warranty period. They did finally agree to transfer the remaining two years of the extended warranty to the replacement laptop. The formal policy is that replacement completely fulfills their obligations under the warranty - even if the replacement occurs during the manufacturer's portion of the warranty period. Unfortunately, this was all happening about the time the stores were disappearing so I didn't get the transfer formally documented before the stores vanished.)

[Jefferson23]

12. Situation geting worse by the day, every day.

[Phred42]

14. and the asshole that ran it into the ground walked with MILLIONS $$

[riverdeep]

15. The stores by us have already closed.

They were just across the street from the Best Buy, as they often were, and they closed some time ago. Although I hate to see people lose work, every time I went in there I was amazed they were still going. It was a really poorly run store with some of the most unmotivated employees I've ever seen in a large chain store. I imagine they were just beaten into dust by the corporate training regimen.

[Roland99]

16. Don't forget the domino effect.

...the commercial real estate companies that will be out on income from the leases that Circuit City will no longer be paying.

[AllentownJake]

18. Guess its time to buy that Ipod at CC

I'm a vulture...sorry.

[riverdeep]

50. Just read this blog post that says maybe not.

Liquidation sounds like a good deal upfront - twenty, thirty, forty percent off of prices that you wouldn’t have paid before, but with the caveat that the liquidation almost always results in hiked prices which are then discounted. Liquidation is a psychological game; it’s about the liquidating company making as much money as possible in as short a time as possible by convincing people they’re getting crap they don’t need at can’t-miss prices. And yes, the same company that did CompUSA is doing Circuit City’s liquidation (I believe), meaning that you should stay as far away from it as humanly possible unless you’re absolutely sure it’s a deal.

and this on why the store succeeded in the first place:

A substantial portion of our retail economy has been built on providing things that are, above all else, easy to buy. We don’t need them, we don’t even necessarily want them, but they’re there, and it’s nice to have them, and if it only costs $60 a month, interest free, surely that can be swung. It why Circuit City fired all of its employees that knew anything and thought that it could make it through based on extending credit lines so that nobody ever pays for anything upfront, ever. They didn’t need to run appealing stores, keep competent employees or even understand how to make money. They just had to understand how to make it really easy for anyone who came in the store to buy something, anything, and then toss a warranty on top of it.

("Rest In Pieces, Circuit Shitty")
http://pandagon.net/index.php/site/comments/rest_in_pieces_circuit_shitty/

[HopeHoops]

20. No shock. I've never found a clerk in any CC that knew anything about the products.

I'm not joking about this. I bought a C-64 there in 1982. Over the years, I have tried to get help. They disappear looking for information, return later and start reading the box - like I couldn't do that myself. They have never put any effort into training the staff on the products and it has always been obvious. And on top of that, most of the display items are broken or turned off so you can't test anything before making the purchase.

It is unfortunate that the competition for Best Buy will be gone, as I think it at least had an influence. Circuit City has been its own worst enemy since the beginning and I'm amazed they lasted this long, but it is also a trend in many areas. Our local pet stores are shutting down so we're stuck with PetSmart and SuperPetz. Lowe's and Home Depot are killing the small hardware stores, and some of the nurseries and garden shops as well. And WalMart is, well, just WalMart. It is really pathetic to travel hundreds of miles only to discover that the shopping options are no different than the main drag ten miles from your home. And don't even get me started on mega-sized grocery stores where you need a tram to get from frozen foods to fresh produce.

Note on Circuit City clerks: My observation is not intended as an insult to the clerks, but rather that the company provided little if any training and it was always obvious.

[Edgewater_Joe]

21. That's What You Get For Paying Sub-Minimum Wages, I Guess

Totally unsurprising.

But, in 2-5 years, Fry's or J&B's or Abt Electronics will step up and take their place.

Someone always does ...

[hunter]

22. They used to grow strawberries where our Circuit Citys sit.

Now no circuits, and no strawberries, just blight.

[SOS]

27. I once suggested a law to my Congressperson

requiring that abandoned shopping centers be torn down, at the property owners expense, and returned to their natural state.
Needless to say, the idea went nowhere.

[Javaman]

28. Lacking that, maybe homeless shelters? nt

[hunter]

32. They could rent out spaces on the floor and in the parking lot.

Sell stuff on it, sleep on it, whatever. Nobody asks, nobody cares. Try to keep the bathrooms clean because some days the toilet custodians are too drunk to get out of bed.

That decrepit motorhome in parking spaces #1457 and #1557 is a brothel and there's a medical clinic inside the building where you can pick up free condoms which would be very wise if you that's why you are here because sometimes the ladies forget.

Give a few dollars to the hungry children, and welcome to the 21st century!

[Javaman]

44. okay, nice snark, but what do you suggest or do not have anything constructive to add? nt

[hunter]

49. Our community has acres of empty retail space.

Our Circuit City store was new, replacing an older one that remains empty. Both were built on excellent farmland.

Overall the U.S. has far too much retail space, and nobody seems to have any idea what to do with it in an economy that is inevitably going to contract into some entirely new ways of doing business. Cheap oil consumerism is headed toward extinction. We've sucked most of the cheap oil out of the ground already and no matter what the price of oil is further development of the oil industry will tend to be unprofitable. Peak oil means high oil prices will always be met with demand destruction. We'll probably be bouncing between one price extreme and the other as overall extraction rates decline.

Big Box stores are not easily converted into housing. People like to live someplace they can look out the window. Big Boxes have few windows. Maybe we could build new housing above the main floor, with shops and factory spaces underneath. Maybe we could use the space for giant thrift stores and indoor swap meets.

It will be interesting to see how this goes. But until we recognize that the "good old days" of consumerism won't be coming back a lot of roofs are simply going to rot out leaving us rubble strewn fields of concrete and asphalt. More and more of the U.S. will begin to resemble the wastelands of Detroit.

Here's a flickr group you don't want to look at if you are feeling down:

http://flickr.com/groups/decay

[Ichingcarpenter]

37. Do you live in SM?

I do and it was a strawberry field.

[senseandsensibility]

59. I knew you were from CA before I clicked your profile

sounds like my town. Very sad.

[kojak]

23. If you sell too much, you get the pink slip

That was the genius message the exec's sent to their employees a few years ago. Absolutely brilliant move.

[Qutzupalotl]

29. I didn't hear about that. What's the story there? (nt)

[Ichingcarpenter]

26. Liquidation to be handled by the jerks who did CompUSA

You know the ones that marked up the price and then discounted
it above normal retail?



Circuit City fought against Unionization for years.

[nichomachus]

30. In May 2007, CC fired all its experienced employees

because they were making too much money -- and they kept all the minimum-wage workers. That's the way to get your company going strong.

[Control-Z]

31. I wonder if they will continue to honor

our extended warranty plans with them?

[SOS]

34. A troubling point

We received an "offer" to buy a warranty on the TV we bought in December 2007.
That "offer" arrived 3 months before our local CC closed.
I think that they were just trying to raise capital before leaving town.
(we didn't buy the warranty)

[jmowreader]

54. My extended warranty war story...

My wife's VCR broke down one day (yes, this was many moons ago) and she decided to replace it with a TV/VCR combo. We went to CC to get it--there was no Best Buy in town then--and picked one out.

"Now, would you like the extended warranty?"

'How much is it?'

"On this product, we sell you a VCR extended warranty for x, and a TV extended warranty for y, so the total cost of the extended warranty for this product is z. That gives you full coverage for three years."

Z was $20 higher than the sale price of the item. I could have done the same thing as their extended warranty by putting $20 more than the price of the item in a passbook savings account.

[DainBramaged]

36. The warranty is usually administered by a third party, but I bet CC, like Best Buy

keeps the money betting you will never come back or forget you bought it. We bought (against my better judgement but at the insistence of my boss) an "extended warranty" with Staples on a $600 Canon color copier. $139 for three years. Know what the extended warranty consisted of? Three years of "technical support" over the phone, the warranty on the PRODUCT is administered by canon, and then for only one year.

What a mistake.

[BreweryYardRat]

63. Best Buy's actually given me pretty good service over the years.

The parts and service plan is expensive ($300 or $400), but if you make technology wear out faster than normal like I do (not intentionally, I just seem to be cursed), it's well worth the money. They'll fix damage that normally would cost more than the price of the PSP to repair. Additionally, if non-battery components break down 4 or 5 times within the duration of the PSP, they've got a "lemon policy," where they'll replace your old computer with a current product of the same price you bought the old computer at.

[blue_onyx]

39. I doubt they will

I mentioned this in a post in "general discussion" but I'll post again. A family member of mine bought a plasma tv there about a year ago and they purchased the extended warranty. The tv has broken twice and they're still fighting to get it fixed for the second time. It's been weeks and they can't even get someone to come out to look at it again (they had an appointment and nobody showed up). I hope the manufacturer will help them out because I know CC definitely won't now.

[DainBramaged]

33. In the early 90's when I was National Sales manager for a large electronics company

which was just acquired by Panasonic because they too were run like shit, Circuit City thought their shit didn't stink. They dictated price points to the manufacturers, how much margin THEY need to make at the promotional pricing, how much advertising and MDF (market development funds) they were going to get from us and everybody else, and how we were going to give them exclusives on certain products. And the consumer got riped off every day.

They were fucks back then, and their passing is not surprising. I cry from my heart for the employees, because there is NO WHERE for them to go. Retail is contracting, and that is not a good thing for America, not a good thing at all.

[underpants]

41. The well healed geniuses at CC also signed (ready for this?) 40 year leases

they bought property that are now near the "old mall" developed them (built the stores) and then sold them and then signed 40 year leases with Consumer Price Index adjustments (always up). They were locked into their locations when Best Buy was building at all the new malls and satellite strip malls.

GENIUS

I know this because I have known several people here in Richmond that worked at the corporate offices.

The Richmond job market just got flooded-which means lower wages and immobility (no competition for talent/experience)

Oh and they also didn't hedge against the dollar going down mainly due to manly patriotism...or so I am told

[DainBramaged]

43. The buyers at CC (at the time) were the most arrogant assholes I had ever met

next to the Walmart buyers, who made real threats about selling our products below every one's cost and ruining the brand if we didn't sell to them. And back in the day, you could buy goods from anyone, no one had scruples. After Wal_mart made Sanyo-Fisher junk, the company went to hell in a hand basket, and is now owned by Panasonic (mainly because they are good at making batteries).

[underpants]

46. CC also had the chance to buy ad space on the FIRST year of....

American Idol

but they passed

Now AI sets the ad sell price at a rate much higher than anyone else

Want to sell you product to 13-28 year olds???? Who doesn't?

Not a good idea for Ford (what else is new) who was the major AI sponsor but for electronics it could have been a goldmine. Especially setting them up as a life-long first consideration supplier to kids who are tech crazy.

It could have been "American Idol- brought to you by CIRCUIT CITY" nnnnooope

Hell imagine the merch they could have moved at the freakin' auditions -- 100K kids in line all day at 5 different cities each

GENIUS

[snooper2]

35. Just went there at lunch- no half price everything yet

but there were 6 workers standing around the front doing nothing- with 1 other customer in store....

They heard about the news from the news- not management by the way

[skids]

70. 10% markdown on some categories here on Sat

Cameras, memory, ink IIRC. Markdown was on top of any price even if
the tag said "sale."

I don't think they are desperate enough yet. About the only thing I could
find worth buying were some D-Link gigabit switches that were about the
same price as online, sans shipping, and I had to buy those on condition of
"no returns" so I almost didn't, but I was pretty sure the product would
be fine so I decided to risk it. Their flash memory prices are a riot,
even on closeout sale. People were looking at me funny as I chuckled at the
ridiculousness of those.

Seems no markdown on games or videos yet. I didn't check audio/automotive.

Employees were being very polite. If I was about to get layed off can't
say I'd be as amenable to vultures like me. :evilgrin:

[Coventina]

38. Another bad outcome: No more competion for Best Buy

Now they can treat people even worse.

[KillCapitalism]

52. Here's an alternative to Best Buy

http://www.newegg.com/

This place has much better prices than Best Buy.

[2Design]

60. best buy is an awful company and their prices are 20% higher than anyone else n/t

[underpants]

40. Circuit City to shut down--CNN

http://money.cnn.com/2009/01/16/news/companies/circuit_city/index.htm?iref=werecommend

Court filing shows bankrupt electronics retailer seeks approval to sell merchandise in its remaining 567 stores.

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.

[renate]

45. we were in there the week before Christmas and the employees were so nice

They were friendly and helpful. I read above that many people had bad experiences with poorly trained Circuit City employees, but we had the opposite.

One of them helped me recover the money from a gift card we'd lost. He was so sweet. This makes me sad, and not just because of the lower-level employees having to suffer because of stupid decisions at the top. In our local store, anyway, they'd really seemed to get their act together.

[slackmaster]

47. Unfortunate for those employees, but after the way CC treated me I'm glad to hear it

They were assholes.

[KillCapitalism]

51. Damn, that's a lot of jobs lost.

I can almost guarantee the unemployment rate will jump to at least 8% next month...8% being the government's fabricated numbers.

[CraftyGal]

53. I have a question for all of you.

Didn't Circuit City have a company called the Source, which in turn bought out all the Radio Shacks in Canada?

CraftyGal

[Bonescrat]

62. Some info from the CBC.

The Source by Circuit City still open as U.S. parent liquidates assets

(snip)

The company (Circuit City) filed for Chapter 11 bankruptcy protection in November 2008. At that time, its Canadian subsidiary, InterTAN Canada Ltd., the owner of 765 The Source by Circuit City stores, filed for creditor protection in Canada.

In a recent statement, InterTAN said it has been trying to sell the Canadian operations as a "going concern," adding that in December it received expressions of interest from multiple qualified and credible bidders. InterTAN said it expects to receive formal proposals before the end of January.

InterTAN also said its retail sales over the holiday period were above forecast and that the Canadian business remains strong.

An InterTAN spokesperson said that "the Source stores are not part of the U.S. liquidation process and that all stores remain open for business."

More at link...

http://www.cbc.ca/money/story/2009/01/16/circuitcity.html

[CraftyGal]

67. Thanks for the information. nt

[tabasco]

56. Thanks, gullible republican voters!

That trickle down reaganomics has done wonders for the economy!

[Kingofalldems]

57. I liked Circuit City a lot better than George's

In the DC-MD-VA area.

[DainBramaged]

58. No one mentioned Tweeter in Boston last year

Liquidations: Say Goodbye To Tweeter

Bankrupt high-end electronics retailer Tweeter is going away for good says the Boston Globe.

Hudson Capital Partners and Tiger Capital Group are planning to liquidate the merchandise at the company's 94 stores. Already, Tweeter's distribution centers and headquarters in Canton are shutting down. Tweeter, which opened its first shop next to Boston University in 1972, will stop its high-end installation services on Nov. 14, said employees at six Massachusetts shops who requested anonymity because they are not authorized to speak on behalf of the company.

http://www.boston.com/business/articles/2008/11/04/tweeter_to_shutter_remaining_stores/

[jazzjunkysue]

61. I may never see my laptop again: It's at Circuit city repair! Ahhh!

[Raine]

66. I think you will see it again...

I was in CC This evening (Friday) and someone ahead of me was picking up something they had had in for repairs.

[jazzjunkysue]

68. Crossing my fingers!!!

[onager]

64. CC, 27 Dec 2008, South Carolina:

I went in a CC to pick up several items on after-Xmas markdowns, including an all-in-1 printer for my Mom. I was on vacation from my job in Egypt.

Incredibly, the line of people returning items was the same as the check-out line. Two clerks, one register open, and that was it. Throngs of people trying to either buy stuff or return stuff.

Other clerks were scattered around the store at the other registers, but they were doing nothing. The FireDog Tech Support (HA!) guy seemed to be falling asleep at his register.

One frustrated woman, with a basket full of stuff she wanted to buy, asked Mr. FireDog if he could help. He woke up only long enough to point toward the LONG line for checkout/return.

That woman did exactly the same thing I did--returned all her potential purchases to the shelves and walked out of the store. I went to Staples and bought the same stuff for the same prices or less. (Staples had the small WD 500-Gb external hard drives on sale for $129. Woo-hoo!)

Even before the big layoff of "experienced help," the CC stores in Los Angeles (where I usually live) were as described by others above. The "associates" were no help, and seemed to run and hide if a customer approached them with a question. If you did manage to find help and asked technical questions, you got blown off with a long-winded sales pitch for extended warranties.

Where I live in L.A., the CC was less than a half-mile from Fry's. The sales help was no better--possibly worse--but Fry's usually had lower prices and more interesting stuff to look at. (Tools, magazines, etc.)

[TrogL]

65. What about Canadian stores?

I believe they're a separate but affiliated store.

The ones here in town seem to do good business.

[Bonescrat]

69. See post #62

In short, The Source (Circuit in Canada) is not included in the liquidation...

They will remain open.