11/10/2008, 9:25am, EST
Monday, November 10thCircuit City files for bankruptcy
Circuit City on Monday filed for Chapter 11 bankruptcy in a last-stage bid to remain in business. The move follows an already drastic step to shutter 155 stores and requires the retailer to reorganize the company and its finances to more readily pay back debts to its creditors, which include Samsung, Sony and other companies whose products are sold through the chain.
The company's decision is believed to be prompted by a rapidly worsening credit crunch as part of a weaker US economy, which has put pressure on Circuit City to reduce its more than $2.3 billion debt. Some companies have insisted on upfront payment for goods delivered to the stores rather than allowing the company to put items on credit. Circuit City has just $3.4 billion in assets.
Apart from broader business decisions, the company's bankruptcy is believed prompted by the rapid expansion of Best Buy, which targets the same general electronics audience and regularly strikes exclusive deals for special products such as the iPhone 3G, which is normally only available through either Apple or AT&T shops. Best Buy has said it may occupy the spaces of stores like Circuit City or its similarly troubled equivalent CompUSA to expand its reach in certain areas.
Filed under: industry
Other story tags: Best Buy, Circuit City, CompUSA
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Headline spelling error
Circuity City? Yikes.
Wooo-ha!!!
Cheap consumer electronics in the hizzy! I love store closings.
Time to Sue the SOBs
Another company screws it's employees, invstors, suppliers.... WhoCanWeSue.com???
Spelling Errors
Wow. The articles here often contain horrible spelling mistakes and word substitution/omissions, but this is one of the first times I've seen something missed that would have been caught by spell checking. The lack of proofreading makes me question how careful they are with the rest of the content of their articles.
Woo-ha
Don't count on cheap consumer electronics. Chapter 11 is restructuring, not liquidating (like CompUSA basically did).
And rarely do they just go nuts and start selling stuff 40% off or something. Usually people get peeved when companies have a 'going out of business' sale and find out prices aren't much different than before (because, basically, people are cheap bastards and when they feel a company is struggling or announced its death, they want to feed off the carcas, forget the sympathy).
Not your father's CC
In the 80's this Circuit City stock did a 100x gain, one of the biggest gains I've ever seen besides Qualcomm in the late 90s. They had excellent management back then. Things obviously changed for the worse a long time ago.
36 Month No Interest ???
This is why they have been offering for the past few months 24 and 36 Month No Interest on their Store Cards! Kinda makes me cringe to think you have a 24 to 36 month payment plan, and then the company does something like this.
You need to look real close at the FINE PRINT of these offers. If a company goes under, your "FREE of Interest" for the balance of the time period goes with it! I had this happen with CompUSA, and Sharper Image too. In some cases they can demand the full payment in 90 days, and jack up the Rate to 29%.
Another thing is, I would never buy a Warranty Package from them now! If they go Bye Bye, so does that $600 Service Contract for your fancy new 65" LCD TV with all the trimmings.
Obama to the Rescue?
And the loss is???
So who cares if another one of these jack-off outfits goes under. Let them go the way of Future Shop & CompUSA. The world will be better off for it.
As for Barry saving things...jeez...gimme a break...
hmmm.
Mr. Strat, And the loss is???
You said "So who cares if another one of these jack-off outfits goes under. Let them go the way of Future Shop & CompUSA. The world will be better off for it."
While I agree that Circuit City was not really to my taste when I went went shopping, mainly due to their lack of customer service. But they left my town around 2000 or so I think. (I could be wrong with the year tho) I also forgot to mention that CC was built across from the Nebraska Furniture Mart, ½ mile from a Best Buy and ¾ mile from a CompUSA. That left us with Best Buy and CompUSA. Well we all know what happen to CompUSA a few years ago. Even then people were saying the same things about the CompUSA stores.
Now the problem is this, CC is now really the only major national player that competes against BB. If they go, what do you honestly think will happen to the prices in their stores? Odds are the same thing will happen at the BB that happens with the walmarts in the world. When they first move into a location, they do initally have their prices lower that other places. But once they kill off the competition their prices do go up. If CC goes away who will keep BB in check. Also think about this, with no players that I know of that are national levels, who will then step in and either open stores or concider merging with CC to keep it competive in the market place? And please don’t say the local rinky-dink local companies. They never have the selection or the buying power of he larger companies. I persoally hope that they come out of this even if it is with fewer stores. It would suck being basically forced to go to BB just because of the lack of choice. Also please don’t say online either, for I want my stuff now, not the next day or in 10 days.
Finaly Mr. Strat, In March 2001, American-based Best Buy acquired Future Shop for more than $500 million Canadian. Despite possible conversions to the Best Buy nameplate, Future Shop was to be run as a separate division under the name of Best Buy Canada. (wikipedia) And how about the loss of jobs making the economy even worse, and declined sales for the companies whose products they sell? The impact is far greater than most really think. Good luck CC hope to see you free and clear next year.
CC
Maybe the government will bail them out. It's all the rage these days.