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Sunday, November 22, 
2:46 am

Circuit City Stores blows a fuse

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circuitcitySM.pngWith its cash and short-term investments down 78% and its market share dwindling, Circuit City Stores Inc. is considering a plan to sell up to 150 stores in order to avoid Chapter 11 bankruptcy, news reports have indicated.

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The move could help bolster the ailing electronics company's liquidity by roughly $350 million through the sale of its inventory -- and help prevent it from becoming the largest retailer to seek bankruptcy protection this year. So far, other retailers reeled into a bankruptcy abyss this year include Boscov's Inc., Linens 'n Things Inc. and Mervyn's LLC, which will also be liquidating 149 of its remaining stores.

Circuit City said it hopes to avert a Chapter 11 filing before the holiday season because it fears that customers will doubt the retailer's ability to make good on product warranties. It's not an irrational fear, either. High-end electronics retailer Sharper Image Corp. stopped honoring customer gift cards when it filed for bankruptcy protection in February.

Will the out-of-court restructuring work for the 59-year old retailer? Hard to say, but Circuit City has tapped the expertise of turnaround firm FTI Consulting Inc. to help out. It's also trying to secure emergency financing to fund its day-to-day business operations.

Given the tenor of the credit markets, if Circuit City does raise that money and can stave off a bankruptcy filing, then there may really be a Santa Claus after all. - Carolyn Okomo





Comments

From: Robert Barr,

These guys are still in business? Seriously, went into one this weekend and I could not believe what a mess these stores are.

I remember a comment made by the CEO of Costco that if a store is dirty and messy, then that location has an issue with shrinkage. Going on the condition of this particular store, I was surprised they had anything on the shelves.


From: Robert Barr,

These guys are still in business? Seriously, went into one this weekend and I could not believe what a mess these stores are.

I remember a comment made by the CEO of Costco that if a store is dirty and messy, then that location has an issue with shrinkage. Going on the condition of this particular store, I was surprised they had anything on the shelves.


From: John Burgenmeister,

Robert Barr- have fun going into best buy and paying more for something you could have gotten cheaper at circuit city.

Yes the stores are dirty, no doubt about that. Thats mostly because of the monkeys running the show in corporate- Its those same monkeys that have the stock now at .21 cents. When Circuit City goes out- and yes it will...(likely within the coming year) Best Buy will have no competition, therefore screwing everyone over on prices. I'm not a die-hard fan of circuit city, but frankly if you were going to shop anywhere for a computer or t.v.- circuit city is better than anywhere else. You can go in and pricematch anywhere (best buy does this but refuses to assist in any way). As an ex-employee...I know all about what people think and feel about the store in general. Most are 20 years old, have the same dirt carpet, and just look messy. Once again, thank corporate for that. When you put an idiot in charge of a company for 20 years, then let a cocky idiot come in and take over, thats why they have issues. The company is run by monkeys in suits. Flatout. They're bleeding money. If you were going to shop for any electronics, you'd be an idiot not to shop at circuit city- everything *and I mean everything* will be on sale (not because of holidays but because of liquidation). 150 stores are closing. Thats not going to stop the money bleeding out of the company. Its a shame. But this happens when you put shmucks in charge of companies. Old farts with money that have no idea what they're doing- yet they think it works. They have plan-a-grams for every store to have the same setup (corporate makes these) Hence why the stores look like crap. The company cares about the company (the stores actually care about customers but get no help from corporate as corporate is just a money hungry entity). Management on all levels should be flushed out. Not employees. Any idiot with a high school diploma can be a manager at circuit city- these store ops and store directors are full of S*it. My "store director" used to be a sneaker store manager just to give you an idea. Which would explain why he's always asking the associates about electronics (which he knows absolutely nothing about). Unqualified people in power. Just like America. Thats the only reason I'm hoping the business goes under- to prove to those shmucks that they destroyed the company. As an ex-employee of Best Buy as well, I can honestly say prepare to shell out more cash for the same things you'd get cheaper. DO YOUR SHOPPING ONLINE.

One final thought- theres shrinkage in every store, every company. Yet circuit city's shrinkage is so severe because they're tagging system and inventory system is bulls*it. Thats why you'll go down to a music cd aisle and find a laptop charger in the middle or go down the laptop aisle and find a t.v. wall mount. Misplaced items throughout the store that are marked as "shrunk" or stolen/lost. Instead of looking, they decide to scratch it off. Losing more money. Multiply 20-30,000 by each store in America and thats a few million right there.

My favorite move overall though is when circuit city fired its most valuable and highest paid associates to bring in unexperienced, minimum wage employees- Thats "great" management.

Any idiot can fix this company now, but its being dragged into the dirt even more because of the big suits in corporate.

Couldn't care less...Im going back to school and have a higher paying job already at my feet. Never wanted to make a career out of it- its just sad to see that a company with so much potential (seeing as how circuit city was best buy's competition) went down in flames. They will be out of business before next christmas, guaranteed.

Theres an all store meeting today as well to discover the severity of the sony trucks turning around and not delivering stock to warehouses. Which basically means that no sony products will be on shelves until this matters taking care of and other vendors can potentially pull out (like HP, Samsung, Toshiba, etc.) and if that happens, the store will be crippled and company will be done.


Sure people are happy to see Circuit City go, but this is not good in the end, as Best Buy will have a monopoly (like microsoft) as the major retailer of electronics. Therefore screwing you on prices, not pricematching remaining companies, and surely pulling some scams in the process (warranties)

DONT EVER BUY A BEST BUY WARRANTY BY THE WAY (ONCE AGAIN AN EX-EMPLOYEE HERE) I heard my manager on a daily basis talk about how B.S. the warranty is and how much money the company makes off of it. Its a ridiculous scam. Best buy isn't the Best Buy folks...Just be a smart consumer and not someone who goes into a store with no info whatsoever on the 7,000 dollar Flat Screen T.V. and buys it w/ the warranty. The associates did not need to have previous knowledge about any electronics to get the job (no background checks or tests were taken either) and frankly, whatever you buy, your basically listening to b.s. from a kid in highschool who doesn't know anything about 1020 and 720 or networking.

Sad...But the economy is going to s*it anyways.


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