Circuit City Files For Bankruptcy
Circuit City has filed for chapter 11 bankruptcy. According to their press release, this will allow them to undergo corporate restructuring, cut costs, get out of leases and figure out a way to still make a go of it. The stores will continue to operate, and they will seek to still allow for returns, exchanges, and gift cards.
Circuit City, Electronics Retailer, Seeks Bankruptcy [Bloomberg] (Thanks to Ken!)
Circuit City Stores, Inc. to Reorganize Under Chapter 11 [Press Release] (Photo: corsec67)
This is a test contextual ad for the SHOPPING category. It should appear on all SHOPPING entries, unless the subcategory has its own ad.
Post a comment
Comments:
Raise your hand if you didn't see this one coming.
I thought that when they closed the stores, they'd be done in a year. I didn't realize that was, like, 11.5 months of overestimation.
The question is whether or not they will accept all those gift cards they sold before bankruptcy.
Kind of predictable at this point. When Sony recalls products, destined to you, you're pretty much doomed.
No gift cards for anyone this year. Just giving crisp gift cards called cash. Can go anywhere to redeem or not.
I hope the big three follow suit.
I went to buy a game from them on friday which was supposed to come with a 3rd party gift card (xbox live points). They were out however, and substituted it with their own GC. So I took my bag out to the car, went back in and bought another game. This one also ended up coming with a gift card. So again, I dropped the game off in my car and went back in to find something else.
During the third checkout process the one cashier on duty asked why i kept coming back in. I explained that I felt the need to spend the gift cards ASAP. When she asked why, I explained very blatantly, 'because i doubt you'll be in business much longer'
She looked like she had been hit by a truck.
At least I gave her fair warning...lol
I hate chapter 11's. This gives this dieing company the unfair advantage of not having to pay their debts and keep product they can't pay for coming into their store. This is totally unfair to retailers with good business sense who can pay their debts. Now cc can get an unlimited amount of product to try and trounce competition one last holiday season. Chapter 11 should be denied and chapter 7 instituted thus liquidating all in the company and paying debtors. Basically, killing the company. Sometimes you gotta tie a tiger to a tree and bash it with a shovel.
@exo: That's priceless. I had a similar experience at CompUSA about a year ago.
Makes me wonder though, what the heck is Best Buy doing right? Because I've always hated them the most.
While it is generally a bad thing but isn't this the best chance Circuit City has left? By doing this they might possibly delay or even stop going out of business down the road?
Circuit City, the K-Mart of technology.
@zigziggityzoo: I couldn't agree more. I've never had a bad experience at CC, but have had many at Best Buy, what's the difference?
@zigziggityzoo: While I don't hope for it, I do mirror your sentiments.
Years of mismanagement and blatant disresepect for consumers will finally takes it toll.
I would caution the foreign auto-makers that do business in the US to take this as an example of not to operate.
Especially 'saved by zero'.
We don't need CC anyway. Adios CC!
Hurrah! I'd be even happier if it were chapter 7 bankruptcy.
I want to know how many golden umbrellas are to be given out for running this company into the ground. Oh and how BIG $$$$$$$$$ are those umbrellas.
Best Buy always seemed more organized to me. It was always easier to browse, and it felt like they were getting more out of their floor space.
I always felt like Circuit City had a smaller selection, and were less "fun" to shop
@Ouze: Chapter 11 bankruptcy isn't the same as going out of business. It's very common for businesses to restructure then emerge successfully from Chapter 11.
A lot of current airlines were in or are in Chapter 11.
@zigziggityzoo: I think BB has a better store layout. They also don't make it hard to find the things that are on sale, like they do at CC. I've also never seen a shortage of workers at BB, whereas I've gone into CC and not seen anyone around when I needed help finding the items that were on sale. I've only bought small-ticket items at both stores (like CDs or DVDs), so I can't speak to what their service is like in other areas.
@mbd: If you read the article, the answer is yes, they'll continue to operate as normal (including gift cards).
what the heck is Best Buy doing right?
They're making money.
Seriously, BB has the following things going for them:
1) More stores
2) Better locations (lots of CCs were built in the 80s and 90s, in areas of cities that aren't high traffic anymore)
3) Better marketing/brand image. Can anyone deny this?
4) Aggressive expansion plans
I could go on and on. They're just a more effective company, period.
And contrary to popular belief around here, the vast majority of people have never had a problem at BB.
I think something everyone who is applauding this should keep in mind is when/if CC goes into the crapper, that makes ALL experiences at Best Buy even worse. CC is and always has been their biggest brick and mortar competitor.
You'd never know it the way we've been getting coupons and circulars in the mail from them. I'm thinking it was unrealistic to think they could compete against Best Buy, given most of their stores are small and not well stocked with variety.
That was quicker than expected.
@InfiniTrent: The beauty of Chapter 11 is that the company can still operate without respect to its shareholders or unions, meaning a good majority of jobs can be kept, albeit at a lower salary, and the Big 3 can dump their "Job Bank" (7000 employees on the payroll doing nothing but sitting in the break rooms simply because it's in their contract).
Chapter 11 could save the Big 3, and save their employees jobs, too.
@SabreDC: K-Mart and K-B Toys have both been in Chapter 11 in recent years, and both have come out and are still in operation. Both took an infusion of outside cash to do so if i'm not mistaken, but still.
I wouldn't go so far as "never had a problem," but BB has a much better product selection and generally better pricing than CC. And while the blue shirts aren't exactly a Mensa convention, they aren't openly lazy and uninterested in customers, a la CC the last couple of years.
But I only shop either place for loss leaders, and then rarely. YMMV.
@zigziggityzoo: No, no you don't. you think you do, but you don't.
Less competition in the market is BAD. If all that's left are online retailers like NewEgg and TigerDirect, there's nothing keeping them from raising their prices.
@SabreDC: I'm just giving examples of businesses continuing to operate as usual under bankruptcy protection.
@zigziggityzoo: Yeah, I know. For some reason, I took the comment as wishing for them to go out of business, not to file Chapter 11. Chalk it up to my response above where I made the exact same point you did. I was projecting, apparently :)
If only this bankruptcy could make their new commercial stop, stop, stop.
The creepy guy and the female TV he takes home make me want to gouge my eyes out.
GOOD may they die a death of a thousand swords! . Anyone remember this from the Spring of this year? Seems payback is a REAL you know what!!! . Circuit City Stores' (CC) decision to lay off 3,400 employees in order to hire lower-paid replacements is raising questions about the impact of severe cost-cutting on employee morale. . The consumer electronics retailer announced Wednesday that it was immediately firing store associates "who were paid well above the market-based salary range for their role." New workers will be paid less, although Circuit City did not reveal the pay of the workers. . Laying off workers who earn higher pay raises the risk of deflating the morale of employees who are left behind, says Penelope Trunk, author of Brazen Careerist: The New Rules for Success. . "People left behind are probably thinking they don't have a future there," Trunk says.
Well the sunday paper had a front page article on Circuit City 'regrets'... They said they were unsure of if they would go the bankruptcy route but a lot of quoted folks in the article said they were in the express lane. Funny how right they were.
How stupid are the CEOs and boards of these companies? Circuit City is local to Richmond VA. When they burned the commissioned salespeople people here dropped them for that. Then they stopped carrying applainces and that killed them as they tried to add EB games to the inside of their stores. That didnt help as the earnings from young folks just wasnt there like it was with older people buying large ticket items from trained staff.
Then they fired everyone that "made too much money". The backlash locally was easily seen. The parking lots are empty as are the stores. No one in the store is trained or informed and actually buying a product is an adventure. Most of the times the cashier in Colonial Heights isnt at the register she is stocking shelves.
Companies keep cutting their products and services and wonder why people go elsewhere. Your cheese doesnt have milk anymore well Ill just go get the one that does! Heck I used to like Hardees but the food is horrible now and expensive. I can go to a regular restaurant for what lunch costs there. Its odd almost like places dont want customers anymore.
A couple weeks ago, my girlfriend bought an LCD flat screen from them and did the credit thing for zero interest until 2010... are creditors going to come calling on her or what?
I hate to see almost any company file bankruptcy,but why couldn't it be Best Buy instead?? I so prefer going to Circuit City over Best Buy. Believe it or not, my customer service experiences at Circuit City have been very positive. I can't say that for Best Buy,but that's an all day rant.
The last thing I bought from C.C. was my Canon SD 870IS camera. They had the lowest price on the camera of all the brick and mortar stores. A few online retailers were cheaper,but I decided to go with them for the ease of return if needed. I ordered it online for store pickup,and away we went. The young lady who helped my wife look at cameras was extremely helpful to her as well.
The news about GM possibly filing is much worse than this though.
@InfiniTrent: Actually, from the previous threads, I thought it was a thoroughly debunked rumor (turned away due to a sinkhole of some kind in the distro center).
I have a laptop that I bought from Circuit City and is still under warranty. This weekend, water was spilled on it so I brought it to Firedog for repairs. They still have my laptop now, should I be worried about this?
@ShirinDirce: 0% deals are finaced to third parties not through CC (or any other company). Even 0% auto loans are through a different entity, so the retail operation going under has no effect on the loans. The retail operation is paid cash immediately for the sale, although I would *guess* at a discounted rate agreed upon ahead of time (to support the 0% financing, I have no idea what that breakdown would be though).
@ShirinDirce: What kamel5547 said, but double check the paperwork to see whom the debt is actually owed to. [They can't go back and change the terms anyway.] I would be more concerned about any warranty and who services that.
Circuit City is financed through Chase, so the debt should still be held under the normal terms.
as long as I can still buy gift cards, I'm a happy camper
=/