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Now that Blockbuster Inc. is out of the running for Circuit City Stores Inc. who are the potential suitors that may bid for the struggling electronics retailer? After the jump, we offer some of thoughts from The Deal's newsroom.
Carl Icahn Carl Icahn could pick up Circuit City. He told Blockbuster that he was supporting its sale, and there was speculation he might finance the deal, but would he buy the company for himself? What would he possibly do with it? Wal-Mart Circuit City could become a target for Wal-Mart Stores Inc. as the retailer builds up its electronics service company. According to a Banc of America Securities LLC report cited in This Week in Consumer Electronics, Wal-Mart continued to build share in the first quarter of 2008, largely at the expense of Circuit City and Costco Wholesale Corp. However, building market share isn't enough for Wal-Mart, according to some in the industry. Last week The Deal's Michael Rudnick reported that Wal-Mart could potentially acquire an electronics installation and services company or build its own. So why doesn't Wal-Mart just acquire Circuit City to catapult its growth in the area? Building out it's own electronics service business won't be easy, and Circuit City already has a national presence in the form of its Fire Dog service. Additionally, Circuit City's brand could become a store-within-a-store concept at Wal-Mart locations. Sears If not Wal-Mart, then why not another large retailer looking to add to its electronics department? Immediate names that come to mind are Wal-Mart's main competitors Sears Holdings Corp. and Target Stores Inc. Sears already does a brisk business in electronics and services like installation and maintenance. Plus, it could also apply the store-within-a-store concept -- a practice it is familiar with thanks to its Land's End acquisition. Plus, Sears could have use for Circuit City's real estate. Sears, which has more than just its namesake brand, could potentially convert some Circuit City stores to other concepts like its Great Indoors home furnishings and improvement business. So those are some of the potential bidders we came up with. What do you think? Can you add any more to the list? - Maria Woehr CategoriesComments
From: chucho,
Amazon.com could possibly bid for Circuit City. A combination of these two companies could create sufficient cost synergies and greater purchasing power allowing both Amazon and Circuit City to become more price competitive. Additionally, Circuit City's online operations have seen continued growth and could easily be merged with Amazon.com's current offerings.
Posted on:
July 2, 2008 10:50 PM
From: Matthew Wurtzel,
I'm not sure I agree with the Amazon suggestion, but your thought about a foreign acquirer certainly makes sense given the weakness of the dollar. Carrefour would certainly fit the bill, but would they keep the format? Circuit City stores are certainly too small for Carrefour's hypermarket format. Would Carrefour or any of the European discount retailers have the stomach to enter the U.S. through a niche business? Are there any European electronics retailer with the scale to build in the U.S.? Instead of a European retailer, why not a Japanese one? Japan has a few electronics retailers, and they may have the scale to cross the Pacific.
Posted on:
July 3, 2008 10:30 AM
From: Robert Stinnett,
Perhaps Sears could focus on getting their act together with their current stores before they run off buying another one. Customer service is the pits and the stores are so dated it's like 1986 everyday! Buying more and more stores is foolish when the ones you have need desperate maintenance and upkeep.
Posted on:
July 3, 2008 6:37 PM
From: Andrew,
I think Apple should make a bid for circuit city. First, any acquisition for CC would probably be around $700 million or so. That represents less than 1/200th of Apples market cap, yet Apple would be getting $11 billion in revenue and suddenly be able to actually have a real storefront presence, other than the few malls and superstores they have. What has CC been lacking? Their staff is widely considered inadequate, incompetent and unhelpful and their stores lack the buzz that competitors such as Best Buy have. Apple has more buzz than anyone, and with their creativity and geek coolness, they really can transform this company, while at the same time be able to dramatically expand their consumer presence. First, they can really promote their own computers, and it is my belief that an acquisition of CC could greatly expand apple's computer marketshare. Second, while they would obviously still be selling all kinds of tvs, they can really make a go at it on the Apple TV. Third, they can cross-sell and promote the heck out of their digitial music and movie business (just as Blockbuster discussed doing w/ CC). They can even change the name to "Apple City" or "Circuit City" at "Apple World." I think if this were to come to fruition, Apple would fully be the dominate force in the consumer electronics industry. Next up: come out with a games consol, or at the very least an itunes like video gaming downloadable delivery system.
Posted on:
July 3, 2008 11:51 PM
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Amazon.com could possibly bid for Circuit City. A combination of these two companies could create sufficient cost synergies and greater purchasing power allowing both Amazon and Circuit City to become more price competitive. Additionally, Circuit City's online operations have seen continued growth and could easily be merged with Amazon.com's current offerings.
Let's also not forget the possibility of a sale to a foreign firm, especially given the decline of the dollar. A company like Carrefour could be looking to take on Walmart in its home market, leveraging the strength of the Euro to buy in to an already established and well known U.S. retailer.