No Deals: Notorious CompUSA Liquidator To Run Circuit City Closings
Your worst suspicions have been confirmed, the liquidator that ran the notoriously awful CompUSA liquidation (they actually raised prices, click here to see a photo) is conducting the liquidation of 155 Circuit City stores.
TWICE says:
Liquidation sales on $300 million worth of inventory that began yesterday at 154 Circuit City stores are being conducted by Hilco Merchant Resources and Gordon Brothers Retail Partners, a government filing shows.
An additional store will be closed by Circuit City on its own.
According to an 8-K filing by Circuit City with the United States Securities and Exchange Commission (SEC) dated Oct. 31, the retailer will be paid a guaranteed amount equal to 72 percent of the cost value of the merchandise included in the sales.
The liquidators, which formed a joint venture, will receive an agent’s fee equal to 3.5 percent of the cost value of the merchandise.
The stores are accepting cash and credit cards, but not selling gift cards or accepting checks.
Send your first hand accounts of the Circuit City liquidation to tips@consumerist.com and/or upload your photos to our flickr group.
Hilco, Gordon Bros. Handling Circuit City Fire Sales [TWICE] (Thanks, Klay!)
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Comments:
Well, if you require someone ELSE to sell your products for you so that you recover 75% of your COST, then you're obviously doing something wrong and have no idea how to actually run a bona fide business.
Circuit City should just close all of their doors. They quite clearly don't have what it takes to make money.
meh, Newegg and Amazon will still be cheaper than their lowest liquidation prices.
Kinda figured that would happen; they don't want anyone getting a good deal except themselves.
I don't understand why Circuit City, facing a credit crisis heading into the holiday season, didn't simply use the inventory from the closing stores to fill up the holiday inventory at their remaining stores, and thus avoid (or at least lessen) the necessity of trying to get an extension of credit to purchase holiday stock.
"...Well, if you require someone ELSE to sell your products for you so that you recover 75% of your COST, then you're obviously doing something wrong and have no idea how to actually run a bona fide business.
well, that's what happens when the business environment you planned on when you bought the stuff, changes. They also don't explain how any excess profit will be split, so there is revenue there as well.
Can someone tell me if the liquidation of Circuit City will be affecting their Canadian chains (known as "The Source")? Perhaps I haven't looked hard enough, but I can find any information anywhere.
I do believe I guaranteed this would happen in one of the first death watch threads. Go me!
But seriously, don't buy anything from these guys until it is at least 50% off (which doesn't happen until there's almost nothing left) or you won't be saving any money at all. I know this first hand from working a closing CompUSA store.
I got (embarrassingly) burned by the CompUsa "markups" so please be careful with this one. Do your price research first.
/granted I love my 27" LCD TV, but the "liquidation sale" price was the the SAME price as any other store. They just massively marked up the original price before discounting it.
I actually went with my brother and made some purchases. Got home and did some price checking-- turns out I got a good deal, in comparison with online vendors who also charge shipping costs.. There are some deals in there, you just gotta be careful.
Oh! And I went in there the first day, found some items that were the last of their kind at the store, too. I'm happy with my purchases. :)
Yeah, I currently work at circuit city and we're liquidating. A 9.99 ipod case is now 19.99, we all had a good laugh. Open box laptops went up $60 too. Liquidating is supposed to make the company money, it's not really a "everything must go" sale.
To all those claiming Circuit City is failing because of the business market and Financiapocalypse, I suggest you pay more attention to what Circuit Crappy has done to actually deserve this failing. Namely, pulling a Home Depot and laying off all of their experienced workers in favor of pimply-faced, apathetic, know-nothing teens. Their love affair with Monster Cables, poorly-stocked & staffed and dirty stores, terrible selection, and expensive prices didn't help either. All of these things led to a sure demise for Circuit City.
Good riddance to a bad company. Sure, things might be a little duller and more expensive with just Best Buy and Fry's around, for a little while. We just need to wait for someone else to get in the game, most likely Staples, Wal-Mart, or Office Deport/Max.
If other CC stores are open, why are they liquidating the stores instead of moving the merchandise to the stores that are still open? This is like setting fire to a warehouse to reduce inventory. Is CC so cash strapped that the present value of the liquidation cash is worth more than the inventory itself to them? If so, this is probably chronic, having too much money in inventory that isn't moving. Definitely a strange proposition. You think CC would slash their own prices in still-open stores to get recession-spooked Christmas foot traffic, since they've already eaten the cost of the inventory in the first place (unless they bought it on debt that's due, hence being forced to sell for pennies on the dollar to a liquidator) and could upsell more warranties to foot traffic customers. I wouldn't want to be a CC accountant trying to spin this in their next statement...
Yup. I wanted a Lumix DMC-TZ5 and it was $345 at the liquidation price. MSRP is $329.99, newegg has it for $225.. with a free 4GB high speed SD card. Including overnight shipping so it'll arrive tomorrow, $245. win
I'm sure they already transferred popular and high profit margin items to their remaining stores, like ipods, large LCD/Plasma TV sets, etc.
The remaining items were probably not cost effective to transfer, like CD's and DVD's, computer software, smaller TV sets, computers systems and parts, etc.
am i the only one who read that as "Liquidator To Ruin Circuit City Closings"?
Keep saying that all you want... the simple truth is both vendors will raise prices due to the lack of competition.
Exactly, they caused their own demise by sacking experienced workers and not operating a customer-focused business.
You have to admit that for all Best Buy's failings, that they do operate a very tight ship in terms of knowing the type of people who walk in the door and how to best sell to them.
Liquidator raising prices?(!)
I just heard that they have to raise the price of all merchandise to MSRP for them to legally claim the percentages off!
No deals to be had there!
Ah, Gordon Brothers. "Finding value where others see none." No joke, that's their slogan. I got to ride the Brookfield, WI CompUSA into the ground with them...
It's very hard to see how anyone can make money selling stuff like this with a physical presence in the High Street.
Let's split the customer base into bits..
First there's the sort who know what they're doing and don't mind waiting a day or so for their stuff. Clearly they're going to buy online as they're going to find better prices - the retailer doesn't have to have a dolled up building and all those droids.
Secondly there's the clued up but in a hurry sort. Increasingly they'll just sit on their impatience and wait till the next day's parcel delivery, but if they really can't wait they'll shop around.
Thirdly there's the not very bright sort who believe the adverts and don't know anything about what they're buying. /Some/ of them might end up in a physical shop, but quite a few will be helped by friends or relatives who know what they're doing.
So - the retailer's trying to make a living by selling stuff at too high a price, paying staff too little to retain those who know what they're doing and all that to a small customer base to begin with.
That sort of premise can't support many retailers for long. My local PC World has moved into much smaller premises and several small independants have closed. I buy online and can't see many occasions when I might do otherwise, and I don't suppose I'm alone.
rumor is some Circuit City Associates of the 150+ stores closing are filing for a civil lawsuit for servance pay. The only thing there receiving is a $.75 extra an hr to make up for not getting servance pay. It will only be like an extra $200 after taxes which will not even cover being out of work for a month.
@mariospants: But do Hilco and Gordon assume the operational costs of the store along with staffing costs? Or maybe CC gets paid up-front (so they can still cut fat executive bonus checks in their final days, no doubt)? There must be some business motivation for doing this.
Simply assuming that CC is incompetent isn't good enough. I mean, we already know that they're incompetent as a retailer, but if you show the big wigs two numbers on paper, they will pick the bigger one. In some way, H&G showed them a bigger number.
I went to one of the stores in Jacksonville, Florida that is shutting down on Wednesday.
The signs outside say up to 20% off. But inside the store most of everything was only 10% off.
Big rip off.
CC almost never has anything I want to buy anyways. The only major thing that was 20$ off of RAM.
My main goal was two get two new 6X9 speakers for my car. Found a cheap set marked down to $37.
You have to pay for the items, then wait for them to pull the spearkers from in the back of the store.
After waiting for while I looked at the receipt and noticed they had sold me 5X7 speakers.
The cashier got the sales rep from that area to come back.
The sales rep explained that 5x7 speakers, "are really close to the same size as 6x9 speakers and they sound about the same."
I explained that I would like 6x9 sized speakers, and after checking they explained that they are out of that size speakers.
They offered to sell the floor model 6X9 speakers for the same price, but they were busted up from people pushing on them, and they couldn't remove them until Friday.
The only other item I was really interested in was a hard drive. The 500 gig was priced at about $150 before a 10% discount. I can get a 500 gig for under $70 online.
Got my refund and left.
@Trencher93: Didn't you read last week when Sony re-routed Circuit City's shipments because they were unsure that CC's credit was good enough to adequately cover the inventory? We know they're cash strapped and in debt up to their eyeballs already.
Which is the store that CC is closing on its own?
@Trencher93: I wondered the same thing on a previous thread. The CC nearest me is only 2+ miles away from another one that isn't closing, but they are liquidating. Pretty much the full gamut of merchandise was offered, including TVs of all sizes, and ipods. "Markdowns" were mostly 10%, with ipods at 5%, CDs and DVDs at 20%, and some stuff at 15%. Needless to say, I left empty-handed.
I agree totally. Why would they not move the stuff to a different store? This speaks of a drastic move to get some cash or just a trial run for a future bankruptcy liquidation.
i was able to get discounts off zune marketplace and microsoft points cards.. about 20-30%..@compUSA.. i think it was a fluke though, cause i went back and they didnt have it posted anymore.
@Trencher93: I don't get this either. Only one CC is closing in my town, so I don't get why they can't just drive the stuff down the road.
Oh well, if I have time on Sunday I'll go over there to see if that computer software I was looking at last time (and was mismarked to be $10 off anyway) is reduced in price.
@Corporate-Shill: But Newegg and Amazon don't directly compete with Circuit City. Best Buy is Circuit City's primary (and pretty much only) direct competition short of smaller box-style B&M stores like Micro-Center or CompUSA.
I did notice that video games aren't being marked up (yet). They were the typical $29.99-$59.99 for PS3 games, but with the 10%, they were still often more expensive than what you can buy on line.
@edosan: They're not... at least I don't think they are.
Many states allow companies to be "at will," meaning they can fire or lay you off at any time, for any reason, without comping you for anything. To the best of my somewhat limited knowledge on this, I think you have to be in a contract to get any kind of severance pay. Not something you'd get in retail.
On a personal note, in my college days I was an assistant manager of one of the over 300 Wherehouse Music stores that went bankrupt. We got a three-week notice, and that was about it. No severance pay, no transfers, nothing. But that's what happens in at-will, retail environment. You takes what you gets.
I purchased 2 Antenna adapters for $15.99 Original Price, Register rang them up as $17.49 I threw a fit in the store, shelf said this price, plus 30% OFF, Walked out the door with both of them for $20.00 total charged to my credit card :-)
Ok, I have to admit that I really didn't understand what happened when a store closed and one of the store closing sales happened.. until I found this blog and other online posts of the same topic. However, I did know that the prices were bad at most closing stores and that it wasn't a deal until the percent off was huge. Most people should be able to see that its not a deal even if they don't know the exact details of the sale. I could see the pricing was not good during the Toys R Us sale where they would constantly change the percent off and mark things up and down as if they were just toying with us. Learning how it works however has made me avoid liquidation sales until its at least 50% off unless I really need something that I cannot get cheaper elsewhere, and its something that I will not need to return and something that will not break easily.
@mariospants: Circuit City should just close all of their doors. They quite clearly don't have what it takes to make money.
They will, don't worry.
Just wait until December 26.
Watch as CC is blamed for the pricing and lack of deals as well, just like when CompUSA went out of business.
@Corporate-Shill: They'll still have Office Max, Depot, Staples, BB, Frys, Tiger Direct, ALL NEW COMPUSA (which is still Tiger Direct, etc. to compete with. Not to mention Newegg's prices tend to be more than competitive a lot of the time.
Also, note that they get 72 percent of the COST value - so when this liquidator marks the hell out of it, then offers "discounts", they're making tidy profits.
More needs to be done to get people to understand that these liquidations are a suckers bet.
The only bright side I see to all these store closings is that it might later on open up an opportunity for some businesses with better business models to come in. Something crazy like decent customer service, no gimmicks and products that people need and will last.
the PS3 console section on the
circuit city website has completly
disappeared.
"The sales rep explained that 5x7 speakers, "are really close to the same size as 6x9 speakers and they sound about the same."."
So, yeah, I don't understand why 6x9s even exist, since 5x7s do the trick just as well. Why do speaker companies make redundant models?
No, really, I'll take the assault charge for whacking one of these idiots on the back of the head.
@thrlsekr: Strangely, my understanding is that raising the prices and then applying a percentage discount is considered fraud in many jurisdictions.
@Firesoul1: Probably because Sony has apparently stopped delivering inventory to Circuit City.
[gizmodo.com]
This company also handled the Sharper Image liquidation...