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Businesses The Almighty Buck

Circuit City Files For Bankruptcy 574

Posted by ScuttleMonkey from the i-bet-their-execs-got-cashed-out dept.
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."
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Circuit City Files For Bankruptcy More

Circuit City Files For Bankruptcy

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  • Yeah, You Could Say That (Score:5, Informative)

    by eldavojohn ( 898314 ) * <eldavojohnNO@SPAMgmail.com> on Monday November 10, 2008 @01:11PM (#25707669) Journal

    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 (Score:5, Interesting)

      by Shandalar ( 1152907 ) on Monday November 10, 2008 @01:36PM (#25708165)
      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.

  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Monday November 10, 2008 @01:13PM (#25707709)
    Comment removed based on user account deletion

    • Re: (Score:2, Informative)

      by tripdizzle ( 1386273 )
      Wow good link. I find this surprising in that I was always told that once you are in the parking lot, the security for the store wont do anything and call the police on you. The security weren't even allowed to leave the building in case of a grab 'n dash. I know a couple people who shoplifted frequently a few years ago and walmarts and targets, they were never caught, but they were also under the impression that security wont leave the building to snatch up a shoplifter.

    • Re:I can't bring myself to have much pity for them (Score:5, Insightful)

      by Mix+Master+Nixon ( 1018716 ) on Monday November 10, 2008 @01:24PM (#25707901)

      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: (Score:3, Insightful)

        by Bryansix ( 761547 )
        I completely agree that the stunt with laying off the highest paid employees was bullshit. But then in your next sentence you say you drive out of your way to go to Worst Buy (Best Buy). At this point can't you realize that the retail outlet and the misinformed sales staff are not needed and buy things through Amazon or Newegg.com?
    • No pity here either. Circuit City was so poor about stocking items listed in the weekly sale ads I got fed up and quit reading their ads all together and actually going to the store became a total waste of time.

    • Interesting.

      I've longed since stopped going to either Best Buy or Circuit City, but I have to wonder why someone can't accept the annoyance in exchange for lower prices *. Fry's does the same thing, after all, but people here generally love Fry's so you don't see anyone complaining.

      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

      • Re:I can't bring myself to have much pity for them (Score:5, Insightful)

        by Mr. Slippery ( 47854 ) <tms&infamous,net> on Monday November 10, 2008 @01:42PM (#25708299) Homepage

        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.

      • Comment removed (Score:5, Insightful)

        by account_deleted ( 4530225 ) on Monday November 10, 2008 @01:42PM (#25708333)
        Comment removed based on user account deletion

    • Re:I can't bring myself to have much pity for them (Score:5, Funny)

      by empesey ( 207806 ) on Monday November 10, 2008 @01:32PM (#25708097) Homepage

      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: (Score:3, Interesting)

        by WalksOnDirt ( 704461 )

        The first place I ever saw that checked receipts on exit was the Price Club (later bought out by CostCo). Initially they took it pretty seriously. On one of our first trips there they noticed we had been overcharged for something and got us a refund!

        • Re: (Score:3, Interesting)

          by Moridineas ( 213502 )

          That actually just happened to me (well, someone right in front of me in line) at a Sam's club yesterday. The people had a cart full of items, the person checking the receipt noticed that there was an extra item on the receipt that wasn't in their cart, and they got sent right to customer service for a refund. It was pretty impressive.

      • Re: (Score:3, Interesting)

        by DisKurzion ( 662299 )

        Wrong. Whether or not they check the reciepts was a store-by-store policy.

        I worked at CC for a little extra holiday cash once. The store was one of the biggest sellers on the east coast. You can bet your ass that every customer's receipt and contents of their bag was checked on their way out. On black friday. Our store took loss prevention VERY seriously.

        I personally stopped about $1,500 of merch from leaving the store, and I only did the door checks ~4 hours a week (Filling in for people on lunch brea

    • ... given the fact that they treat their customers like criminals [switched.com]

      Best Buy has the same policy. After a confrontation with one of their rent-a-cops, I no longer shop there.

  • shoplifting (Score:5, Funny)

    by bugs2squash ( 1132591 ) on Monday November 10, 2008 @01:15PM (#25707741)
    The entire loss was due to shoplifting, they should have been more suspicious of their customers. Hopefully there will be a crackdown now.
    • Wait, I though all their stuff was free? All their software said "CC" on it. That means "Creative Commons," right?

    • Re:shoplifting (Score:4, Interesting)

      by IronChef ( 164482 ) on Monday November 10, 2008 @01:35PM (#25708143)

      Best Buy is on it. I went into a BB to return something once, and I didn't have a receipt... They made me wait while they reviewed the security videos to make sure I walked in the store, and didn't just pick the item up off a shelf.

      They were very rude throughout the entire affair, which surely made any real shoplifters nearby head for the hills.

      So, invest with confidence! Best Buy is an invulnerable retail fortress. What could go wrong?

      • Re:shoplifting (Score:5, Insightful)

        by AbRASiON ( 589899 ) * on Monday November 10, 2008 @06:22PM (#25713141) Journal

        Is this post a joke? I can't tell, I really can't tell, if it is bravo, you got me.

        If this post is not a joke, good lord, wow! You Americans and your expectations from retailers continue to fascinate me, absoloutely and utterly incredible, it's got to come to an end.

        I've been using the internet now for about 12 years and I'll never forget the first time I heard some of the stories you guys would relay.
        Rebates, incredibly cheap prices compared to the rest of the world, massive huge stores with IT gear in them, like KMart sized IT stores, wow!
        You can actually purchase a product and then go back a week later if the price drops with your receipt and they give you the difference, what the hell? Over here that's 'tough luck buddy' (and to be honest, so it should be! you bought it when it was higher, tough!)

        The deals you can find on the internet still blow me away "buy this router for 11$ get a 9$ rebate" "buy product X for 50$ with a 30$ rebate" yet these same items cost 80 or 100$ US over here!

        Now I've just come across your post, and I sit here unable to comprehend it.
        You're telling me you want a store to give you a cash refund on a purchased product without a receipt and you have the audacity to whine about it?
        Really? Where's the bloody proof you purchased it?
        You could have stolen it.
        You could have purchased it cheaper somewhere else, effectively stealing from these people.
        You could work for the manufacturer and get them cheaper.
        It could be broken.

        There's a plethora of reasons why companies demand a receipt, it's common bloody consumer knowledge, I mean seriously what next will you people expect from retail stores? "Sorry, I don't have the cash on me now but I promise I'll pay next week!"

        This way of doing business and being so competitive and catering to the ever pushy consumer (and a large portion of Americans are a very pushy consumer) is what's causing business's to go bust, admitedly circuit city was a dump but really, there needs to be a sharp dose of reality kicked in here.

        Disclaimer: Not all Americans are pushy, not all business's in America cater to some of the ridiculous whims of the consumer, none the less as a foreigner the above is the impression I have gathered over the past 10 years of speaking to some of you guys and gals on the internet, really - you had it good, you had it too bloody good in some ways, consider yourselves damned lucky... price protection for goodness sakes.. sheesh

        • Re: (Score:3, Informative)

          by IronChef ( 164482 )

          My friend, the reason why I complained about the treatment is that it was the store's policy to give a refund, even without a receipt. (Well, with no receipt, you'd get a store credit, technically.) I wrongly assumed that all readers would know that about the place.

          So I went back to the store to take advantage of the posted policy--which is lenient to attract customers--and was unhappy at being treated poorly.

          If I was trying to get something out of the store that the store was not offering, I would be a dic

  • La Source (Score:5, Interesting)

    by Win0ver ( 613215 ) on Monday November 10, 2008 @01:16PM (#25707755)
    Circuit City bought all the Radio Shacks here, and changed their name to "La Source: by Circuit City" Do they all get closed too?

    • Circuit City owned all the Radio Shacks in Canada for years before they changed the name. Best Buy owns the Radio Shack trade mark, but was content to let Circuit City use it in Canada until the moved in with their Future Shop take over. Then Circuit City was forced to change the names of all the Radio Shacks to The Source: by Circuit City. Best Buy even tried starting up new Canadian Radio Shack chain, but they didn't last long.

      I understand The Source in Canada is doing okay. It will likely be sold off and

    • Us anglophones are inflicted with the same blight, but it's called The Source: By Circuit City", which in my books is one of the most retarded and awkward names in the history of crappy stores.

      I gave the chain one last chance when I went in for a headphone adapter. I found it, and the price said $4. I double checked, as I always do, by looking at the barcode on the packaging (xxx067, for example), and then on the price sticker on the shelf (xxx067, match).

      I get it to the counter and it rings up at $16.99.

    • Re:La Source (Score:5, Funny)

      by archen ( 447353 ) on Monday November 10, 2008 @01:51PM (#25708509)

      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.

      • Re:La Source (Score:5, Informative)

        by Skevin ( 16048 ) on Monday November 10, 2008 @02:48PM (#25709607) Journal

        Radio Shack has unrecognizably revamped themselves throughout their lifetime. The original name came from back when they were selling equipment catering to ham radio enthusiasts. Then, at some point, they were only selling record players and stereos in the 40's, and suddenly the staff dumbed down - my grandfather had difficulty requesting things like 3200-ohm resistors anymore, or having them made behind the counter by staff.

        In the 1960's they declared bankruptcy (just like CC this morning), but a certain Charles Tandy bought them out. Tandy was a leather mogul, and the chain was temporarily renamed... wait for it... Tandy Radio Shack & Leather! Radio Shack was the place for all your leather needs! BTW, I have a genuine Radio Shack bullwhip in my attic. Too bad I never got around to asking for a ball gag and blindfold.

        Then they went back to concentrating on low level electronic components. Then they switched the emphasis on to trying to sell home computers. Then they switched to almost strictly consumer electronics.

        So I don't think of Radio Shack as a cockroach, whose form hasn't changed for millions of years... It's more like the Phantom, when each one dies, it passes the name and costume to someone in the next generation, who most likely has different tactics and fighting styles.

  • Didn't they push the evil DIVX? (Score:5, Interesting)

    by bennomatic ( 691188 ) on Monday November 10, 2008 @01:18PM (#25707769) Homepage
    Didn't things start to fall apart when they tried to push that crazy DIVX rent-and-throw-away DVD format?

  • Circuit City short circuited by the credit crunch.

  • could hurt Best Buy... (Score:4, Interesting)

    by More_Cowbell ( 957742 ) * on Monday November 10, 2008 @01:21PM (#25707837) Journal
    But I doubt [consumerist.com] it. [consumerist.com]
    Their prices and selection always sucked in my experience, and it does not look like the liquidation will change that.
  • I've always been disappointed in their offerings, and yet as one of the only retailers of their type in the area I always felt the need to stop by and be frustrated by their lack of anything. Between our new Best Buy and game stores in the area, I certainly won't be missing them.

  • Oh well. (Score:5, Interesting)

    by fuzzyfuzzyfungus ( 1223518 ) on Monday November 10, 2008 @01:23PM (#25707875) Journal
    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.

    • Re: (Score:3, Insightful)

      by gemtech ( 645045 )
      I was wondering if anybody was going to mention Micro Center. At this point in my life I've now bought several computers from Micro Center, and lots of repair stuff (CPU fans, power supplies, etc.), always good folks and a minimum of hassles with any problems. 21 locations all of the country, but clearly not everywhere. Pretty decent web store. I bought one of the first IBM PCs for an engineering project at the original store in Westerville, OH, back in 1982.
  • Man that commercial made me wonder why a kid would want a yellow sport walkman, it never did make me want to shop there.

  • ...was the fact that they were across the street from the office. When you walked in, you always got mobbed by their people. They were waaay overstaffed with people who just ask "can I help you with anything" every five minutes. I would avoid "window shopping" there, for that very reason. I'm sure there were plenty of other ways they lost sales; but that was the main reason they lost sales from me. That, and when I made my last major purchase (LCD TV), Target whipped the pants off them price-wise. I w

    • Are the purposes REALLY "intensive"? That's a mangling of "for all INTENTS AND PURPOSES". I'm normally not a nazi, but when you're being picky about grammar yourself in the sig, its too hard to resist.

  • Discounted Merchandise (Score:5, Insightful)

    by CopaceticOpus ( 965603 ) on Monday November 10, 2008 @01:27PM (#25707963)

    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 (Score:5, Interesting)

    by sunking2 ( 521698 ) on Monday November 10, 2008 @01:27PM (#25707967)
    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.

  • I know its just not me... (Score:3, Funny)

    by vertinox ( 846076 ) on Monday November 10, 2008 @01:31PM (#25708071)

    But didn't anyone feel sad because of their memories of formatting those Windows 3.1 machines they had on display in Circuit City back in the early 90's?

    That and putting something "cute" on the marquee screen saver.

    Maybe I indirectly lead to their demise some odd 20 years later after making the one person who could have saved the company quit in frustration because of those damn brats.

  • Have a look at Best Buy and how Best Buy continues to have a better, more attractive retail space. On the other hand, Circuit City got more and more confused and worse and worse. I used to like to go to Circuit City and Comp USA but both those stores screwed up their floor plans so much that I lost interest in them. On the other hand, I was in Best Buy and it just amazed me, how nice it was.

    • Yeah. I actually preferred Circuit city's layout. Which means it was probably worse. There was more open space to explore with less items to buy packed in. I also liked their car stereo department better. The people that worked there actually knew things about car stereos and installation was included in the purchase price. From my experience, they had better service as well. They didn't hassle people making a return. They also never had a salesmen telling customers lies about computer parts/ accessories.
  • What seems to have not made it out of the Richmond area is that they laid off 500-800 people last Friday from Corporate in addition to the ones they're laying off from the store closures. That's a lot of people to dump into an already poor IT market.
  • I wonder how many Circuit Cities are not basically next door to Best Buy. This seems to be the strategy of expansion Circuit City used. Best Buy has a store, circuit city builds across the street. I guess this is good if one can compete on this basis, but really. How many appliances and stereos does a city really need? And might a better strategy for Circuit City be services a part of the City not served by Best Buy?

    • Re: (Score:3, Interesting)

      by vux984 ( 928602 )

      I wonder how many Circuit Cities are not basically next door to Best Buy. This seems to be the strategy of expansion Circuit City used. Best Buy has a store, circuit city builds across the street. I guess this is good if one can compete on this basis, but really. How many appliances and stereos does a city really need? And might a better strategy for Circuit City be services a part of the City not served by Best Buy?

      Perhaps surprisingly, this is a good strategy. Often both stores next to each other actually

  • USE UP YOUR GIFT CARDS! (Score:5, Informative)

    by BUL2294 ( 1081735 ) on Monday November 10, 2008 @01:43PM (#25708357)
    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.?

    • Re: (Score:3, Interesting)

      by DriedClexler ( 814907 )

      This practice (of treatment of gift card holders in bankruptcy) has always repulsed me, and here's why: When a store sells any other product, *it's gone*. It's not theirs anymore. They don't get to repo it to pay other creditors, no matter how bad their business is. But with gift cards, they do. You'd think that "$50 worth of Circuit City merchandise" is no longer theirs to give away, but you'd be wrong.

      Ho, hum, right? But no, it gets worse when you think about it this way:

      By considering you as an unse

    • Re:USE UP YOUR GIFT CARDS! (Score:5, Funny)

      by powerlord ( 28156 ) on Monday November 10, 2008 @02:08PM (#25708833) Journal

      Best new idea for Holiday Stocking Stuffers:

      Giftcards from companies about to file for bankruptcy.

      Hey, its not YOUR problem if the $100 giftcard (that you only paid $5 for), is worthless by the time the recipient can actually use it.

      It's the thought that counts ... right? :)

    • Re: (Score:3, Informative)

      by russotto ( 537200 )

      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.

      It gets worse. Suppose you've ordered something, and paid for it, but the store hasn't delivered it yet. This undelivered merchandise is part of the bankruptcy estate and can end up being re-sold to pay off other creditors.

  • Commissioned Sales People (Score:5, Interesting)

    by zubikov ( 1172699 ) on Monday November 10, 2008 @01:48PM (#25708461)
    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?

  • At least in our area, Circuit City had the prices of Sharper Image and the customer service of Fry's. I can't remember another store where it was so difficult to buy something. (Well, I tried to do some Christmas shopping at CompUSA last November when the whiteshirts had already been given their layoff notice, which was arguably a worse experience, but that hardly counts.) You couldn't find anyone to help. If the merchandise was in a locked cabinet, you might as well leave, you're not getting it. And

  • Doesn't surprise me (Score:3, Interesting)

    by chrisgeleven ( 514645 ) on Monday November 10, 2008 @01:58PM (#25708617) Homepage

    The CC in Manchester, NH is really hard to get to, right in the middle of probably the busiest street in the city with numerous stop lights in each direction. It sometimes can take a good 15-20 minutes to get from the highway to CC when the traffic is bad. I almost never see the parking lot with more then 15 or so cars in it, most of those are probably employee cars. The employees are always standing around because there is nothing to do either.

    Meanwhile BestBuy is down the street at the local mall, but right next to a highway exit, making it much easier to get in/out. It is always busy and surprisingly there is usually someone available to help you (although I never ask for help, as I know where to go).

    To me, it doesn't surprise me that this is happening. In fact, I was shocked that the store here wasn't part of that 1/5th of stores closing announcement.

  • Now that Circuit City has failed... (Score:5, Funny)

    by IGnatius T Foobar ( 4328 ) on Monday November 10, 2008 @02:14PM (#25708971) Homepage Journal
    ...I'll bet its owners now wish they had accepted the extended warranty.

  • In other news, Buy More stores still open (Score:4, Funny)

    by AgentPhunk ( 571249 ) on Monday November 10, 2008 @02:26PM (#25709213)

    Its great if you can get Chuck from the Nerd Herd to work on your PC, but otherwise the store is full of spies, spooks, and narcs.

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