Circuit City Files For Bankruptcy

WillDraven is just one of many who writes to tell us that Circuit City, the United States' 2nd largest consumer electronics retailer, has filed for bankruptcy under chapter 11. This news comes as no surprise as the company has been in financial trouble, recently announcing that it will be closing over one fifth of its stores and laying off 17% of its US employees in the process. "Larger rival Best Buy, which is based in Minneapolis, has said it might take over stores that distressed rivals close. Yet a flood of discounted merchandise from liquidating Circuit City stores could hurt Best Buy during this holiday shopping season, said Jefferies & Co analyst Dan Binder."

Yeah, You Could Say That

[eldavojohn (898314)]

This news comes as no surprise as the company has been in financial trouble ...

"Financial trouble" doesn't begin to describe it, their stock's been below 25 cents for a few days now [google.com]. I was debating on blowing 20 bucks and demanding the paper stock be sent to me so I could have fancy roll of toilet paper to put near the can when guests are over. It wouldn't be a horrible investment as I'm sure it'd have other uses too ... lighting cigars with it, using it as wrapping paper for Christmas, etc. A man's gotta increase his perceived wealth among his peers, you know.

Make sure they have a transfer agent

[Shandalar (1152907)]

Seriously - I attempted this once with a different company and was not able to get the paper shares because they lacked a 'transfer agent' at that point. Make sure they can deliver.

I can't bring myself to have much pity for them...

[Shakrai (717556)]

... given the fact that they treat their customers like criminals [switched.com]. Besides which, my local electronics place usually beats them on price -- and there's always online shopping.

Re:I can't bring myself to have much pity for them

[Mix+Master+Nixon (1018716)]

Good riddance to a disgraceful company. Let's not forget how they fired all their highest-paid, most experienced employees and allowed them to re-apply for minimum wage positions. After they pulled that stunt I never spent another penny there, going way out of my way to go to Best Buy instead when I needed to purchase something from that sort of store and didn't have the time luxury of getting it from the internet. Don't misunderstand: Best Buy sucks too, but at least they're not Circuit City.

Re:I can't bring myself to have much pity for them

[empesey (207806)]

The receipt check they do is bogus anyway. They don't actually check anything on the receipt. Basically, they look to see you have a receipt. They never look in the bag to see what you have, and they certainly never match what's in the bag to what's on the receipt. After they do a receipt check, quiz them on what you bought. They will never be able to tell you. Never!

Re:I can't bring myself to have much pity for them

[Culture20 (968837)]

Laws are different in different states. Just before CompUSA closed, I had a manager and security guard refuse to let me leave the building until I showed them my receipt. After some arguing, I gave in, then laughed in derision at the manager, saying this draconian policy is why CompUSA was losing business. Seems like Circuit City followed suit.

Re:I can't bring myself to have much pity for them

[squiggleslash (241428)]

Too likely to get into trouble. A simpler solution is to do exactly what the manager is asking for: show them the receipt. But at the Returns desk.

Re:I can't bring myself to have much pity for them

[Mr. Slippery (47854)]

What you have here is not a violation of any rights, they weren't going to search purses and handbags (although some stores do - but they clearly post that they reserve the right). It's implied consent when you shop at a store like that, and if you don't like it, don't go back.

Searching my bag - whether it is a bag I came in with, on my brand new (once my purchase is completed at the register) Joe's Discount Electronics' bag - is indeed a violation of my rights. I don't surrender my rights because you put up a sign.

If specific and articulable facts lead you to a reasonable suspicion that I have been involved in a crime, they can hold me and call the cops. Store personnel have no right to search my person or my effects, and they do not gain such by posting a sign. All they can do if I don't comply with their store policy is ask me to leave and not come back - which, when treated like a criminal, is exactly what I want to do anyway.

Re:I can't bring myself to have much pity for them

[Shakrai (717556)]

What you have here is not a violation of any rights, they weren't going to search purses and handbags (although some stores do - but they clearly post that they reserve the right)

I don't think putting up a sign gives them the right to go through my things. At best they could ask me to leave if I refused to let them go through my bags. Of course this is a moot point unless they are going through the bags before you enter the store, because by the time they asked you to leave you would already be on your way out the door anyway.

It's implied consent when you shop at a store like that, and if you don't like it, don't go back.

I'm sorry but it's not. If I put up a sign on my front door that says "all female guests waive the right to refuse to have sex with me" does that mean I can rape with impunity? All they can do is ask you to leave -- but unless they are enforcing this policy when you enter the store (as opposed to when you exit) it's kind of like closing the barn doors after the horses have already escaped.

To think, that guy could have avoided all the hassle, all the wasted time and money, just buy opening the plastic Circuit City bag and showing the receipt.

He probably could have. Some people are willing to give up their rights to avoid a little hassle. I'm not one of them.

Yes, I read where you said the local place beats them on prices. Then why do people shop there? There must be some compelling reasons.

Because Circuit City is on the flashy commercial strip and the local place is tucked away in an old part of town that most people aren't familiar with?

Re:I can't bring myself to have much pity for them

[Shakrai (717556)]

I'm not familiar on Ohio law, but in many places it's illegal to not have some form of ID when over 18.

Too bad, because if you had bothered to become familiar with Ohio law before opening your mouth you would have discovered that Ohio law [ohio.gov] specifically says that you aren't required to hand over ID:

"Nothing in this section authorizes a law enforcement officer to arrest a person for not providing any information beyond that person's name, address, or date of birth or for refusing to describe the offense observed."

And BTW, just where in the United States is it illegal not to have ID on you?

Re:I can't bring myself to have much pity for them

[corsec67 (627446)]

It depends on the state, but in Colorado, an employee can detain someone if the theft detection alarm goes off.
From the Colorado Revised Statutes [michie.com], 18-4-407.

shoplifting

[bugs2squash (1132591)]

The entire loss was due to shoplifting, they should have been more suspicious of their customers. Hopefully there will be a crackdown now.

La Source

[Win0ver (613215)]

Circuit City bought all the Radio Shacks here, and changed their name to "La Source: by Circuit City" Do they all get closed too?

Re:La Source

[archen (447353)]

And on that note, Radio Shack survives Circut City. Totally bizarre that nothing seems to kill that chain. I'm starting to think that if there is a nuclear war, I may just run to radio shack since they seem to strangely survive everything without rhyme or reason.

Didn't they push the evil DIVX?

[bennomatic (691188)]

Didn't things start to fall apart when they tried to push that crazy DIVX rent-and-throw-away DVD format?

Oh well.

[fuzzyfuzzyfungus (1223518)]

I'm not exactly optimistic about brick and mortar electronics shopping in the even grimmer world of hegemonic Best Buy(thank the FSM for a local Microcenter); but Circuit City really, really deserved it. Unimpressive prices, incompetent service, paranoid treatment of customers, that whole "Hey, let's fire our best salespeople and attempt to hire them back at insultingly low wages" incident... Reduced local competition isn't a good thing; but Circuit City was too sick to survive, or even deserve to survive.

Discounted Merchandise

[CopaceticOpus (965603)]

A flood of discounted merchandise from liquidating Circuit City stores could hurt Best Buy during this holiday shopping season

I hardly think a company that sells a cable for $129.99 [bestbuy.com] when a functionally equivalent cable is available for $5.43 [monoprice.com] is concerned about the availability of discounted merchandise.

Discounted merchandise? Not likely

[sunking2 (521698)]

As anyone who tried to find a good deal when compusa went under, good deals will be few and far between. Oh, you'll see lots of 30-50% off stickers, but they'll be against the MSRP or some other jacked up price. They will never come out of this and the inventory is worth more to them as an asset for some liquidation company than if they sell at too much of a loss. And I question how much inventory they really have anyway. Last time I was in there the shelves were pretty bare and I imagine the stock room is by now too. This has been well over a year in coming.

USE UP YOUR GIFT CARDS!

[BUL2294 (1081735)]

One thing that people don't realize is that when retailers declare bankruptcy, their gift cards are worthless. You're considered an unsecured creditor, which puts you in the back of the line among all other creditors. If there's anything left, you might get pennies on the dollar for what the card is worth--a few years down the road. Some companies plead their cases with the courts to allow gift card holders to use them--after all, if those people lose their card values, they won't be shopping at the now-bankrupt company, especially when the company needs those customers most...

At least Consumers Union is trying to petition the FTC [thedeal.com] to force companies to honor outstanding cards... But I can only see this happening if a retailer chooses to reorganize--forget it if they're liquidating.

So, the best advice is to use up your gift cards NOW , before the retailer goes under. Given that Linens & Things, Lilian Vernon, Sharper Image, and now Circuit City all went bankrupt in 2008, this problem will get worse FAST.

I'm curious to know if this is a problem limited to U.S. retailers... Is this an issue in Europe, Japan, etc.?

Commissioned Sales People

[zubikov (1172699)]

I worked at CC from 2000-2002 as a commissioned salesman. CC differentiated themselves by being the only national electronics chain with a loyal, knowledgeable, community-oriented staff. We're not talking 17 y/o high school juniors, but middle-aged sharks who at least knew what they were selling. This worked and stores were in the black, but the 2001-2003 economic conditions caused the clueless management to shift the blame on the sales force and divert to the hourly model. Since then, the store became a cheap knock-off of Best Buy with no value added to the customer. It was only a matter of time before this happened. They were too late to the online game, and were wiped out by the Neweggs and the Amazons. RIP another pointless store that takes pride in making people borrow money they can't afford to pay back. Who's next?

Re:Weak

[eldavojohn (898314)]

I might be crazy, but it was always so dark in their stores. Maybe that was to enhance the rest of the lighting.

It's called a target market. They were catering to the goth market that was alienated by positive, well lit, bright blue, khaki wearing Best Buy employees.

You didn't notice the nipple rings and dark eye shadow being "standard flare" for Circuit City's uniforms? What about their efforts to exclusively offer The Crow on Blu-Ray or the Circuit City brand razor blade impulse aisles?

Re:Weak

[eln (21727)]

Unfortunately, they didn't take into account the fact that after spending 99% of their disposable income on black eyeliner, goths have very little money left for consumer electronics.

Re:Weak

[Lumpy (12016)]

Problem is they kept pushing a card game on everyone...

http://en.wikipedia.org/wiki/Gother_Than_Thou [wikipedia.org]

for more info about it.

Plus the emo kids were all committing suicide in the aisles when they found they could not buy copies of panic at the disco.

Re:Bailout

[truthsearch (249536)]

AIG is FAR bigger than Circuit City and tightly intertwined into the economy of the country. Nothing will change with CC going out of business except their employees losing jobs. AIG going out of business would mean huge collateral damage to the entire financial industry, which would then affect every other industry.

I'm not saying I'm for the bailout. But AIG has a massive impact where CC does not.

Re:More Evidence that the American Consumer

[tgd (2822)]

If you paid $600 for your computer, it might've had an enter key on the keyboard ...