Circuit City looks for a suitor, Blockbuster likely to be it

Oddly enough, the far-fetched proposal is apt to be accepted. Circuit City has reportedly solicited the services of Goldman Sachs to help "negotiate a deal," which will essentially put the troubled electronics retailer in the hands of someone else. As it stands, Blockbuster looks to be the most interested in picking up the pieces, with billionaire Carl Icahn (Blockbuster's largest shareholder) agreeing to finance the get-together. Of course, it looks as if Blockbuster may be the only outfit interested. Not like that's any surprise, however, as Best Buy itself is having to look to Europe to boost revenues with US consumer spending off from where it once was. The real question here is whether a Circuit City-Blockbuster combo would be the perfect concoction to turn things around for both flagging firms, or will we find that two sinking ships actually do go down faster when anchored to one another?

[CRAP @ May 11th 2008 1:04PM]

Match made in hell for buyers - both corps treat you like slaves -

[wako @ May 11th 2008 1:45PM]

my thoughts exactly :)

[shanoboy @ May 12th 2008 8:33AM]

I couldn't agree more. Both these companies are being shut out by cheaper online retailers that don't ass rape their customer base.

I say to hell with both of them.

[ryan @ May 11th 2008 1:03PM]

This seems very foolish, when I think blockbuster I think movies not gadgets.

[derX @ May 11th 2008 5:33PM]

When I think Blockbuster, I think failing business. Ever since NetFlix came onto the scene, Blockbuster hasn't been the same.

This will be an interesting experiment. Both will probably be going the way of CompUSA--outside of Florida, of course--within the next five years unless they make some big changes.

[BananaBoat @ May 11th 2008 11:46PM]

I hereby dub the combined company: City Block



.....

Circuit Buster?

[John @ May 11th 2008 1:07PM]

Whatever works... and if it doesn't work, good riddance.

[Chrisvanren @ May 11th 2008 1:45PM]

"or will we find that two sinking ships actually do go down faster when anchored to one another?"

I think that is exactly what we will find. The last time I ever saw/bought anything useful @ the right price from either of these stores was in '97. I've called circuit city a few times in the past couple years to see if they'd have some pretty standard products that I couldn't find/or were out of stock @ some other major retailers. Surprise, they did not have them. Circuit City stores just take up precious real-estate.

[Ignatius @ May 11th 2008 2:03PM]

I got an awesome deal on the Pioneer HTS-GS1 system there. It's about $150 after shipping online... and I got it for $40.

[SKI @ May 11th 2008 3:31PM]

Ignatius, I hope to get a bunch of deals like that if CC goes under.

[L.M.L.Y.P @ May 11th 2008 7:37PM]

I work at a CC, and i cant wait for it to go under , get me all sorts of ...... wait... place has nothing i want!!!
maybe theyll go back to open box dvd spindles for $1 and other things for a dollar . Oh happy days.

[Metamorphic @ May 11th 2008 2:05PM]

Ohhhh Bluckbuster and Circuit City sitting in a tree F-A-L-L-I-N-G...

It was windy...

...


:|

[Sameer Surampalli @ May 11th 2008 2:16PM]

I'm actually employed by Circuit City as a sales employee. While our company does suck and so does our product selection, high management has told us that we are in position to sell out to Blockbuster.

While this was during the first sale proposition, I doubt it will change. Circuit City has turned down offers about 4 times now. The company does have about half a billion in bank (true fact, you can quote me on that). I don't think it'll go out in a while nor get sold out.

[Virtuous @ May 11th 2008 2:55PM]

Circuit City and Crap Buy both suck. People are much better off buying over the Net.

[Dan @ May 11th 2008 7:53PM]

Generally speaking, yes, but if I need something in a hurry, Fry's electronics has a huge selection and prices that rival online retailers such as Newegg and Zipzoomfly. So there are exceptions..

[Michael C Taylor @ May 11th 2008 2:57PM]

I put myself through college working at a Circuit City, and I spent about a year working within their "Generation C" test market in the Northeast.

During my time there, they tried to sell us a new corporate culture that cared about the employee's. They often preached about the "positive change for 30,000 people and their families."

After I graduated and got a real job, they laid off 7,000 managers and "highly paid" employees for "making too much money." These were some of the most knowledgeable and loyal associates (many of them exceeded the new pay scaled because of how long they had worked there) - and this was their reward.

Circuit City was simply too slow to change and adapt, and their attempts to salvage a sinking bottom line, by essentially double-crossing their most loyal associates makes it very hard for me to get too sympathetic or sentimental about their demise.

[dadamaja @ May 12th 2008 12:26AM]

i like circuit city but as soon as this deal goes through i will never shop there again, i went thru hell with blockbuster years ago trying to charge me false late fees and for movies i never rented or movies that i bought back and they said i didnt. to hell with blockbuster

[chris joseph @ May 11th 2008 3:38PM]

Sales people at Circuit City always seem to be disinterested in actually selling anything. I'm not surprised they're going under.

[ZeroCorpse @ May 11th 2008 3:45PM]

This is a last-ditch effort by Blockbuster to save their bacon. The business is circling the drain thanks to Netflix (especially their on-demand service), XBox Live Video Marketplace, Cable/Satellite TV, TIVO, Apple TV, and other solutions for movie rentals and purchases.

In six years, Blockbuster will either not exist, or they'll have changed their entire business model to survive.

As for Circuit City, they have gotten some awful press-- especially with that mass lay-off they did-- and people just aren't eager to do business with them. Say what you will about Best Buy, but at least the employees don't hound you and pester you while you're there. If CC employees aren't on commission, they certainly act like it.

The days of commissioned electronics, appliance, and gadget sales are done. The end started when Highland Appliance went out of business because they couldn't keep up with the new big box stores, and continued through ABC Warehouse (few locations left), Fretter, and others who tried to compete nationally.

Best Buy is mowing them down one by one. Once Circuit City falls, there will be no major competitor to Best Buy. Hate them all you want: Apparently the general public prefers them to all the other choices they've had.

[Andrew @ May 11th 2008 4:08PM]

Wow holy crap, a non-biased person posting comments on engadget. This is amazing!! By far the most intelligent comment i've ever read on this site.

[Dan @ May 18th 2008 12:33PM]

@Andrew

Way to butcher the comment.

[Matt @ May 11th 2008 11:06PM]

I can see Blockbuster doing better by lowering prices. Perhaps they could match the $1 rental charge for DVDs other places have. Same with Blu-ray discs, how much do those even cost now? They could get the business of people who only rent movies once in a while.
Or perhaps focus more on games? Gamefly was horrible last time I tried it, I didn't like waiting 5 days to get a game shipped from California to Michigan. I hear it's better now, but I believe they still don't have one in every state.

[MBS @ May 12th 2008 1:41PM]

@Matt Blu Ray discs are still very expensive. There is a reason why netflix isn't that eager to get into blu-ray or games; they get stolen in the mail.
Sure, mailing DVDs are fine, they are cheap enough that it's not worth the risk of stealing them. Games and blu-ray is another matter all together.

[YouFaceTheTick @ May 11th 2008 6:58PM]

Yay! The silliest partnership in decades! This is illogical as GE buying NBC. Blockbuster -a failing enterprise - and Circuit City - another failing concept - married in 2008 so they can fail as one big company!

[peestandingup @ May 11th 2008 7:44PM]

Uhg, who cares about this company anymore??

Mark my words, they'll be dead sooner than later. Blockbuster ticked people off for years & years with their exorbitant late fees, making many an enemy & disgruntled customer along the way. They didn't offer anything new, any new ways of renting that might save their customers money & make for a better experience & service. Now, they're playing major catchup to services like Netflix & Gamefly, who are doing it better, faster & cheaper, while constantly exploring new alternatives (Netflix video streaming online). Other online streaming/downloading video services are going to become major distributers of how we get our content as well.

This is what happens when you screw customers in the long run & don't offer anything new for them, holding onto old & tired models for too long. Big rental chain stores are played out these days, seeing fewer & fewer visitors because its just not a very efficient way of doing things nowadays. You have to get in your car, drive to these places, hunt down the movie you want, pay an inflated price for it, drive back home, return it in a day or two & possibly deal with late fees. Yeah, where do I sign up for that?

The rental market is correcting itself & Blockbuster isn't part of that plan. They honestly did it to themselves. Good riddance.

[ngamer007 @ May 11th 2008 7:54PM]

This article is misleading. The company currently has no intention of selling to Blockbuster.

Philip J. Schoonover, chairman, president and chief executive officer of Circuit City,
commented, “While the Circuit City board has confidence in the company’s ability to
successfully implement its turnaround plan and generate shareholder value, we believe that we
can best serve the interests of our shareholders by exploring all possible alternatives to enhance
shareholder value. Let me be clear that our decision to allow Blockbuster and Carl Icahn to
conduct due diligence should not be taken as an indication that the board has completed its
review of the Blockbuster proposal, that the board has taken a position on the company’s value
or that it has settled upon a particular strategic course of action.”

[Tone @ May 11th 2008 8:20PM]

I hope both companies die a fiery death. Specially Circuit City.

[Viakenny @ May 11th 2008 8:36PM]

here in Brazil, Lojas Americanas, a major department store chain, bought the Blockbuster license, converted nearly every Blockbuster to smaller Americanas Express stores (still featuring a Blockbuster), and added Blockbusters to its bigger stores.

[Mike S. @ May 11th 2008 8:49PM]

Worked at CompUSA for 2 years and Circuit for about 1; Circuit now looks like CompUSA 3 years ago. Two investment firms totaling about 16% of Circuit's stock are telling executives to do the deal while company exec's are supposedly trying to resist... Let's see what the other 84% of publicly traded stock owners say.

[Anthony Campola @ May 11th 2008 8:56PM]

I was a manager of a cc for about 2 years. I was forced to let go some of the best employees in my store. They were the best sales people in the store and after they were fired for making to much money, Then had to wait between 3 to 9 months for there severance checks. After the best employees were let go we then were forced to hire what ever we could get and the most money any new employee that wasn’t a senior could make was 10.50 and hour. Oh by the way the needed 5 plus years of retail experience to even make that much money. There next plan was clean all of there store and re merch to make it look better because then people would shop there. Well that didn’t work as you all know. Shortly after all of that I left and went to work for Best Buy. They are the better company in this i hope this deal goes through because I hate both of these companies and for them both to fall at the same time would really make my year.

[kingsfan4life @ May 14th 2008 1:48AM]

I currently work for Circuit City and all I ever hear at our store is how much better my employees are than the ones at our local Best Buy. Circuit City has a tainted image to be sure, and while the layoffs were completely unprofessional and hurt the company, Circuit City IS rebuilding. Maybe not in certain areas, but I can tell you that at my store, service is #1. We've stopped hiring "high school kids" in the television department and I have a growing force of dedicated workers.

While you may hate Circuit City you have to realize that the worst thing that could happen is for it to go under. Competition is part of business and it means prices, whether you like us or not, WILL go up.

[tpayne @ May 12th 2008 5:02AM]

.well purhaps things will improve with "The City" coming soon to a city near you. its a somewhat differnt company.. now mind you the sign says "THE CITY..circuit city" but hmm we shall see I am actually looking forward to it. we shall see

[snap08 @ May 12th 2008 7:46AM]

Does anyone find something wrong with this picture, IT's like the days of Ma Bell and the Baby Bell's.

Someday we all just really be buying our DVD's from 1 or two major companies.
Best buy= now owns Compusa outlets.
Blockbuster= NEtflix and circuit city.

Just better ways to track what you buy kiddies so they can remarket it back to your demographic.
be very afraid.

[dosguy @ May 12th 2008 1:40PM]

"or will we find that two sinking ships actually do go down faster when anchored to one another?"

Blockbuster and Circuit City are not the ships that are sinking. They are merely passengers on the ocean liner known as the USA, which, with George W. Bush at the helm, recently struck a hugh economic iceberg known as Iraq.