The Wall Street Journal took a look at Circuit City’s current predicament today and concluded that they’re in deep sh*t. But that’s great for bargain hunters, right? Nah. Not really.
“Contrary to consumer perception, you don’t typically see tremendous deals” at liquidation sales, said Stephen Baker, a vice president at market researcher The NPD Group.
In fact, some liquidation companies actually raise prices before slapping clearance stickers on the merchandise. Circuit City may not resort to that tactic, but don’t assume you’re getting a good deal just because the store is closing.
Speaking of Circuit City stores, the WSJ also pointed out that the stores that aren’t going under might be empty. As in, nothing to buy.
The “credit noose is tightening,” said RBC Capital Markets analyst Scot Ciccarelli, who noted that it’s unlikely Circuit City will be able to get the inventory it needs for its remaining stores during the holidays.
The paper also suggested that Circuit City might actually be too broke to file Chapter 11 bankruptcy, and is trying to stay afloat in order to avoid liquidation.