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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."
Circuit City bought all the Radio Shacks here, and changed their name to "La Source: by Circuit City" Do they all get closed too?
Didn't things start to fall apart when they tried to push that crazy DIVX rent-and-throw-away DVD format?
The CB App. What's your 20?
But I doubt it.
Their prices and selection always sucked in my experience, and it does not look like the liquidation will change that.
Experience teaches only the teachable. -AH
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.
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.
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?
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.
Probably just a matter of area of country, but I always took Best Buy as a more successful Circuit City knockoff. We had a Circuit City around here for close to 15 years before I saw a Best Buy. I still remember their old ads on TV with the giant red electrical plug coming down out of the sky to "plug in" and form the front of their building.
And honestly, I'm sad to see them go. They always had at least as good of inventory and prices as Best Buy, but never the "rebate hell" issues Best Buy initially had (I know they've fixed this now but it was a big turn off early on that still influences me), and less pushy sales staff.
Not sure about the lighting conditions you mention though. The two of them here were always very brightly lighted.
I'll admit though that I rarely bought anything there anymore. Prices and selection are better online, so Circuit City was relegated to impulse purchases and things that I really wanted/needed right now with no wait (ie, my mouse died about a year ago and all my old spares were PS/2 only - my new KVM is limited to USB. It was worth it to me to buy a replacement locally rather than wait 3-5 days to get a new one in).
"People who think they know everything are very annoying to those of us who do."-Mark Twain
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?
I also think CC going out of business completely would be good riddance.
I'm gay and CC has a poor record with the GLBT community. The HRC Buyers Guide for Equality (Google It) gives Best Buy a perfect score of 100, while CC has a dismal score of 50.
I refuse to sent any of my money at their stores...
Derek
www.dereketnyre.com
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.
I haven't given them any business in many years. Each time I've been tempted to shop there, I keep having terrible experiences that drive me away again.
The most recent example was 6 years ago. I had recently purchased a house and wanted a home theater system. I decided to try Circuit City again, and after browsing around for a while (and fending off the sales droids that were harassing me) I wound up with $1000 worth of merchandise in my cart. The audio sales droid, apparently wishing to get a commission for doing nothing, asked to check me out at his register in the back of the store. Things were going along OK, until he got to the infamous Circuit City extended warranty push. After he started that, I cut into his monologue and told him, in no uncertain terms, that I wasn't interested in the extended warranty. He began to protest, and I reaffirmed that he should stop talking about that and move on. He said fine, but he had to tell me about the warranties that came with my equipment. I told him to go ahead, and he began describing the stock warranty information for the selected equipment. He then segued back into the extended warranty pitch! So, I simply turned around and left the store. I stopped briefly to tell the manager what happened, and that I had just abandoned $1000 sale because his people didn't know when to shut up. So, I walked across the street to another electronics retailer, and got a similar setup for $200 less! That was just the most recent example, I had quite a few others related to service on a VCR, and other problems with sales people.
The biggest surprises for me related to this story were that they hadn't gone out of business before, and that they were the #2 electronics retailer!
They didn't close because the economy sucks. No. They closed because we can shop for consumer electronics from sites like Tiger and NewEgg and get better prices, to boot. People aren't buying less consumer electronics, they're buying less from overpriced stores like CC. Good riddance.
One more thing - when is your going-out-of-business sale?
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 "$50 worth of Circuit City merchandise" is no longer theirs to give away, but you'd be wrong.
Ho, hum, right? But no, it gets worse when you think about it this way:
By considering you as an unsecured creditor, that effectively means that when CC sells a gift card, they are selling a financial security, like a stock or a bond. Now, think about the normal procedures you have to go through to buy securities, all the hoops the SEC makes you, and the issuers of securities, jump through, all to protect you from yourself. Now, whether or not you agree with that kind of paternalism, you have to realize that they are effectively *exempting* businesses from ordinary laws about securities -- by not making them jump through these hoops to issue additional debt/equity -- and they're doing it in *just* the very case that hurts the little guy with least capacity to sue.
Now, go tell Circuit City that your financial situation isn't so good, so you want back some of the money you gave to them years ago, and let me know what happens.
Information theory is life. The rest is just the KL divergence.
Yeah, in general I'm wondering what's the right thing to do with stocks I own that are very low in share price. Normally I don't try to "pick stocks" at all, and I don't buy or sell based on movement in prices -- the only reason I own individual stocks is that I wanted to have a socially screened index fund that met my own idiosyncratic social screening criteria. But my understanding (corrections would be appreciated!) is that when a stock goes down below a certain share price or a certain market capitalization, it can get delisted. After delisting it can only trade as a pink sheet, and there may be problems with liquidity. Here are the NYSE's listing criteria, which include (with some oversimplification on my part) market capitalization of 100 M$ and a share price of $4. They don't lower the boom immediately if a company falls below their standards, but when you're getting down to share prices of $1 and $2 it's pretty clear that it could be delisted. So what's the smart thing to do? If I sell, it costs me $7 for the trade, and I could just be locking in losses. If I hang onto it, I could lose my ability to liquidate it, and even if it retains liquidity I'm also not clear on what happens as a practical matter if I own a stock via an online brokerage, and then it goes to the pink sheets market -- hassles for me? expenses?
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I really havn't visited Circuit City since they stopped paying the employees commissions. When I used to enter a Circuit City, an employee would FIND ME, and try to sell me something. Many employees were actually well-informed, because they had to justify their attempts to upsell people who came in just looking for "a computer." This made purchases much easier than any other store with apathetic employees.
The last time I stepped into one of their stores, the employees didn't give me so much as a glance. I've known for quite some time that the company was doomed, and tossing the commission structure was the first sign of the end.
Man is the animal that laughs.
And occasionally whores for Karma.
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!
a,e,i,o,u and sometimes w and y (at be if of up cwm by)
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 breaks, etc). In retrospect, I wish I hadn't. Bastards are reaping what they sowed.
You won't succeed, as it's not legally required in any US state. Police officers can demand your name, and in some cases your address and destination. But they can't demand that in the form of state issued id. They may in some states detain you for up to 2 hours to confirm that what you've told them, and you might be able to go about your business faster if you hand over id, but you are NOT required to do so.
They can definitely demand a driver's license if they are stopping you while you are driving.
"Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
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 do better than they would have without the competition next door.
On the one hand, yes, they obviously are losing customers to the 'neighbor', but on the other hand far more people drive and come from much further away to shop there. On balance, though, it tends to work out to be a net win. The total extra traffic overshadows what they lose to the competition, and both do better.
Its the same reason many major cities have 'auto-malls' or all the wedding dress shops are on the same street, etc. Consumers head over to do all their comparison shopping in one localized area, preferring that to driving halfway across town to comparison shop, and then potentially having to drive back again if they decide to buy what they saw at the first place.
Electronics are the same. Put a best buy up, and it will do well... put a circuit city up next to it, and you have electronics store mecca that will attract buyers from much further away.
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.
Of course, if the cops show and decide that you're just being an asshat, you could be in trouble for abusing the emergency line...
How is calling the emergency line when being held against your will "abuse"? If you are attempting to leave a location and another person is preventing you from doing so then that person is committing a crime.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.