Circuit City considering shutting stores to avoid bankruptcy

It's made it through some tough times in the past (the other DIVX, anyone?), but it looks like Circuit City is now really up against the wall, and it's apparently considering some rather drastic measures to avoid becoming the largest retailer to enter bankruptcy protection in recent years. According to The Wall Street Journal, "people familiar with the company" say that Circuit City is contemplating closing at least 150 stores and making the associated high number of job cuts in order to get itself in a better position to shore up some much needed financing, which it has been unable to secure so far. To put things in a bit of perspective, before it packed up and went home, Blockbuster offered to buy Circuit City in February of this year for $6 to $8 a share. The company's share value as of this writing? 40 cents.

[Via MarketWatch]

[Kiwi616 @ Oct 20th 2008 12:25PM]

Not good, hopefully they won't close the one near me....unless they offer some deeply discounted pieces to clear inventory

[Jeff @ Oct 20th 2008 2:20PM]

Hopefully they don't close before Black Friday. Haven't seen their ad posted early yet.

http://www.blackfridaysites.com

[OneLove @ Oct 20th 2008 2:23PM]

I just bought a 50 inch Samsung (PN50A450) at Circuit Shitty for $1000. it was a steal!

[Balam Herrera @ Oct 20th 2008 2:29PM]

Screw all the unemployed, my electonic savings are far more important!

Hope they close and have a big clearout sale!!!!

[THizzle7XU @ Oct 20th 2008 2:54PM]

Then who will make Best Buy competitive? I like CC, I hope they pull through. I got a great deal on my 46" Samsung TV from them last year.

[a ham sandwich @ Oct 20th 2008 3:17PM]

the one near me was stupid enough to open DIRECTLY across the street from best buy after best buy had already been there a few years and had become a staple of the area. needless to say, best buy destroyed them and circuit city shut its doors after only two years in business. commack, ny anybody?

[LEIGH @ Oct 20th 2008 6:03PM]

I AM THRILLED THEY ARE HAVING PROBLEMS!! THEY WERE SO RUDE TO ME AND WOULD NOT STAND BY THE PRODUCT THAT I BOUGHT FROM THEM, A PALM PILOT, AND THEY TOTALLY RIPPED ME OFF AND WERE SOOO RUDE TO ME. I AM NOT SURPRISED AT ALL. THIS WAS THE STORE OUT BY NORTHWOODS MALL IN PEORIA, ILLINOIS. WHAT COMES AROUND GOES AROUND. THEY DESERVE IT.ALL THE STORES ARE PROBABLY NOT MAKING A PROFIT IF THATS HOW THEY TREAT THEIR CUSTOMERS ESPECIALLY ONES WHO BUY THE WARRANTIES FOR THEIR PRODUCTS WHICH THEY CHARGE AN ARM AND A LEG FOR AND THEN YOU CANT USE IT. GOOD THATS WHAT THEY GET!

[rock99rock @ Oct 20th 2008 6:00PM]

@LEIGH

Are you working in Oracle? No? You're at a 7 and we need you at about 3 mmmmmk?

[Axton @ Oct 20th 2008 6:23PM]

I kind of always preferred Best Buy anyways. But I am with you, looking forward to clearance electronics *crosses fingers*

[Pepsipoint @ Oct 21st 2008 9:50AM]

Yes I look forward to another competitor going bust, so that the few left can raise prices through the roof because I havn't an alternative.

[xnifex @ Oct 20th 2008 12:27PM]

Oh snap! $.40! Ouch. They should have taken the offer!

[rock99rock @ Oct 20th 2008 12:33PM]

Buy! Buy!

But seriously, don't.

[Dave @ Oct 20th 2008 7:22PM]

CC did not refuse, BBI backed out after seeing the books.

most CC don't work like other stores, if you are in a line at the front counter you are at the wrong place, find an associate and get out line!

Check out 'The City' stores, CC will prolly spit into two groups, Circuit City Stores, and The City Stores.

CC or BB are the same store, in concept and SOP. Hell even Firedog and Geek Squad follow near identical Scope of Works

[Prokanda @ Oct 20th 2008 12:30PM]

have you ever been in a Circuit City or [what used to be] CompUSA? and then gone to a bestbuy?

there's a reason that CC is having issues. high prices when compared to BB (same thing that killed CompUSA), smaller stores with less products, and (at least in my experiences) generally less-knowledgeable staff.

this is why I only shop (and recently started working for) BB (GeekSquad). crap, even BB's shares are down. it's just the current state of our economy, but that doesn't give CC an excuse to get stale and drop the ball on their hiring/training process. once-upon-a-time I loved CC. but now, BestBuy seems to be king.

[waiownsyou @ Oct 20th 2008 12:33PM]

Not to mention the checkout lines are just oversized paperweights that can't be moved. To check out at my local CC, you have to go up to some random salesperson and they make you pay at a random computer by an aisle. It's so stupid. And the people there rarely know what they're selling. Don't get me started about their disorganization.

[bandigolo @ Oct 20th 2008 12:42PM]

These complaints are right on and universal problems for CC. I don't know why so many worthless people send resumes to CC, but I've never seen such consistent employee shittiness in a retail chain.

I will say, however, CC has higher-end TV's/Home Theater than BB, and usually the models the two stores share are equally priced between the two (and if they weren't, CC would match it). In fact, I often find deeper discounts at CC if you look hard at the right times. It's enough for me to check CC first, then BB or Fry's (even though I know I'll want to punch somebody by the time I'm done shopping).

Hope this means that CC's Black Friday/xmas deals will be fire-sales!

[Brian @ Oct 20th 2008 12:49PM]

Circuit City typically offers televisions for several hundred dollars less than Best Buy. At least, here in Concord, NH they do. According to their website, their prices are also in many cases lower than Best Buy's (prices on CC's website do not generally reflect the individual store's prices, but all you have to do is tell them and the price is yours). CC also offers 10 - 15% off coupons on and off during the weekends on select models.

Interestingly enough, I bought one from Best Buy (a floor model 32 inch Sony XBR for $800) after buying a 40' and 46' Samsung from Circuit City (I got cold feet, and it is a good thing. The same 40 inch TV is NOW less than $1000 -- I wish I had waited, but I like this Sony a lot)

[Prokanda @ Oct 20th 2008 12:54PM]

maybe it's just that there are much larger stores elsewhere, but I live in a heavily populated (see: 5 military base equipped) area and our CC is across the street from the BB (which is in the same shopping center as the now empty CompUSA building). So there are plenty of shoppers in the area... yet there is still just a wall of about 15 tv's at CC. BB on the other hand has a wall of 30 and a few additional rows for what won't fit with the rest of the stock. I'd have to say, at least in my locale, that there are quite a few more options.

also, one of the things I liked about BB (even before I became an employee) is that if you bring them a price from another store, they'll match it. and if you buy a product at BB and up to 30 days later another store has it for cheaper, they refund 110% of the price to you immediately.

all the more reason for CC to be on the short end of the stick. =(

[Scotty Dont @ Oct 20th 2008 12:56PM]

I have to disagree with you. I actually worked for best buy (geek squad) and was a double agent for 2 years. I now work for CC (firedog) and have to say that its all in the store that you go into. I am probally the most certified person that works at a retail store (I hold an A+, Net+, Sec+, CCNA, and MCSE (Server 2003)). You may ask what am i doing working at CC, well the economy is crap and its hard to find a good IT job in california right now so I am back in school (to finish my BA in Computer Engineering) and working retail gives flexable hours. I have gone into some BBY stores in my area and the employees do not know anything about the products they are selling. But the BB store I worked in had some very knowledgeable employees. Its retail... you really cant expect much when they are only paying the sales people a lil more than minum wage. The CC store I work at is not a normal CC store, its actually called The City. Its a new concept for the company and I think that it may help us out of this slump. I am not saying by this statement that BB is a bad company and that CC is better, but you really need to put everything into perspective before you make a judgement about a company.

[Prokanda @ Oct 20th 2008 12:58PM]

*price difference.

so, let's say you get a tv for $1,000 at bestbuy and next week circuit city offers it for 800. just show your receipt and the competitors ad at the customer service counter and BAM, you get $220 from bestbuy.

not too shabby if you ask me (or the average consumer). I haven't been back to CC in a long time, does anyone know if they offer something similar?

[Prokanda @ Oct 20th 2008 1:02PM]

@Scotty:

which is exactly why I said "(at least in my experiences)" and made sure to say that I was talking about the area that I live in.

as for the "price difference" process, I know that they do this at all of the best buys. it's part of their "SOP" so that you can expect the same policies at all of the stores.

the CC in my area (or the BB for that matter) may only be flukes... but judging by the stocks... I'd say that they speak for themselves.

[wako @ Oct 20th 2008 1:16PM]

LOL!

BestBuy is just as bad as CircuitCity. I use to work there and I can tell you one thing, only reason why people know anything there is because you are forced to sell those PSPs and PRPs. If you dont know anything you wont sell anything and thus they cut your hours. And their prices are just as ridiculous at BestBuy. Stop drinking BestBuy's cool-aid and open up your eyes, BBY is shitty place to buy anything as well.

Im glad I didnt buy any of the stock options when i was working at BestBuy. When I was there it was 90 dollars! Now its a paltry 23 bucks!

[Prokanda @ Oct 20th 2008 1:32PM]

@wako:

I'm not forced to sell anything... you're talking about the people on the floor that are usually in highschool and make 7 bucks an hour. as for "if you dont know anything you wont sell anything and thus they cut your hours".... uh, duh? if you can't pick up on what you're supposed to be selling... and therefor DON'T sell what you're being
*paid* to sell, then yeah, I could understand a company who's business is selling products cutting someone's hours.

and yes, brick and mortar stores do usually have higher prices than say, online stores? I'm guessing that's what you were referring to, but you didn't specify. and I'm sure that Egghead had high prices on their products too... which is why they dropped the physical stores and opened Newegg.com. just to that they *could* sell products for less. but the customers that know what they want, how much it should cost, and where to get it usually don't come into a bestbuy, circuit city, or compusa looking for someone to point them in the right direction.

there are also people that like to get a hands-on with a product that they can't get online. as for higher prices, yes... and that's why bestbuy has the price guarantee. another reason that people like to shop at physical stores is that if they have to return a product, they don't have to pay to ship it out like they do with an online counterpart (if that online counterpart even offers the extended warranties of places like BB and CC).

As for "drinking the cool-aid" that's "Kool-Aid" and I don't blindly let people lead me around. I do my own research and pay attention in my day-to-day routine. I like bestbuy and as I said before in THIS article, I liked bestbuy before I even worked there. I've shopped at bestbuy, circuitcity, newegg, amazon, buy.com, tigerdirect, and many other places for my tech needs... and when I'm building a machine or buying something that I can find on newegg.com, that's where I go.
when I want to buy a new CD or something that I need immediately, I always check the websites and then sometimes go out to buy it... it just always seems that bestbuy has offered me the best customer service and prices in the past.

as for stock prices.... it's our economy. many people have purchased stock just to watch it fall in value in recent times. like I said before... bestbuy seems to be far better off than the other retailers of its type and I personally think that it's for a reason.

*just as a disclaimer: this is just in my area and covering my experiences. other people might have different experiences with customer service staff, availability, location, price... whatever.
this is just my 2 cents worth.

[bandigolo @ Oct 20th 2008 2:23PM]

@ Scotty

"I am not saying by this statement that BB is a bad company and that CC is better, but you really need to put everything into perspective before you make a judgement about a company."

While I am a huge proponent of not judging a restaurant by 1 or 2 bad dishes, this is corporate retail we are talking about. These are not boutiques or independent franchises. If my experience has consistently sucked at a handful of corporate locations (say 8 stores in 3 states the past 5 years), I absolutely have the right to pass judgment on a company as a whole. The facts that some stores are better staffed than others, and some employees are enthusiastic and well-qualified, are mostly irrelevant in a market that is driven primarily by customer satisfaction - especially when other options exist.

I hope that you and all other good CC employees aren't negatively affected by this, but the lazy teenagers standing at the registers and the oblivious jerks in corporate had it coming.

[Knives_Out @ Oct 20th 2008 2:30PM]

best buy sucks.

[Riot @ Oct 20th 2008 3:12PM]

CC, Best Buy, and CompUSA are all in about the same price tier. Problem with CompUSA was complete lack of focus, management, quality control, and ability to adapt top of their cash cow (expensive laptops) dying. Witness their decision to put mini-Circuit Cities in their stores instead of creating a service-oriented atmosphere for computer shoppers like Apple and Best Buy did so well

Circuit City's got the same problem, they're failing on basic retail execution, and the first bullet to the foot was firing all of their best salesman.

[mayhem85 @ Oct 20th 2008 4:36PM]

Well the reason I left CC is the way they manage your individual numbers... when I was supervisor they wanted me to start to warn, then write up, and then terminate associates who werent hitting 10% CCAPP (circuit city advantage protection plan) penetration... 1 in 10 computers to have an overly priced protection plan?... yes best buy pushes plans as well but I don't get chewed out for not selling one I dont get threatened to be written up...

maybe firing the thousands of people they did 2 years ago is coming to bite them in the ass eh? that was a moral booster when i started let me tell you...

you couldn't pay me enough to go back to CC ever...and it wasn't just one manager, all the managers were trained to treat the employees like walking profit generators and not people... not a single manager that i worked with still works at CC (that only a total of 9 in two years lol but they are all in different companies now) doesn't that say something? hell even their CEO (douche) left...

as for the the "the city" concept, its great in theory but those stores carry about 1/10th the product and i felt like a wounded animal in between a pack of wolves the way they kept attacking me...

glad i jumped ships before the big red one sinks...

also the blue kool-aid tastes alot better than the red one...

[tekd @ Oct 20th 2008 9:16PM]

Truth be told both stores resort to some stuff I really wish they didn't to make money (and yes, I do mean marked up USB cables, marked up GeekSquad and Firedog services, and marked up warranties). Honestly, with proper management Circuit City probably could have gone on the attack with some real innovations to boost revenue and profits, but it seemed like they were just content to clone Best Buy's business model, which is a terrible idea if you're the weaker competitor.

If anything they should have gone for the jugular and relied on stuff other than cables to make money, and sold cables at a fair price (with TV ads about how they don't rip you off like their competitors) to steal customers away from Best Buy. Yeah you'd sacrifice the profits on the TVs and printers but eventually you'd be able to charge higher markups on televisions once Best Buy was forced to stop marking up cables to sell them. And as a smaller chain that doesn't sell quite as much volume they probably should have gone to a more Costco-esque selection of televisions all at competitive prices instead of carrying too many different TVs that don't sell. Plus, having less TVs also means less costumers totally confused as to which one of 20 different 42" HDTVs all priced around $1000 they should buy-and if you only carry a few TVs your associates might even stand a chance at having a clue about each TV. If I was running the place I would have LONG expanded the video games section and started attacking the used games business with game buybacks with credit towards new games, to get people back in the store and to steal the rich profits from Gamestop, etc. Gamestop is making so much money now that they managed to triple their 2007 profits.

Haha, if Circuit City (or Best Buy) starts doing these things I'm gonna friggin' sue them now. But seriously, CC's management are a bunch of uninnovative idiots who just sat there and waited to be killed.

[htd @ Oct 20th 2008 12:30PM]

they actually opened one not too long ago in my area, let's see which ones are to be shut down. there are too many CVS/walgreens/officedepot/officemax/staples with very little customers...

[Andrew @ Oct 20th 2008 12:40PM]

Except that CVS/Walgreens/any pharmacy makes so much money on the prescriptions and less on the non-drug things so they aren't necessarily customer dependent (numbers wise). If a store gets less customers, they don't need as many people working at once. Plus, whether or not the economy sucks, you co-pay generally stays the same so an economic downturn isn't going to effect these stores as much.

BB and CC on the other hand....they need to keep staffing their employees while at the same time people are spending less so either less profit overall or they are losing money.

People will still need drugs, no matter the state of the economy, esp with baby boomers getting older.

[Stiv @ Oct 20th 2008 12:30PM]

Stiv buys 10 computers for $500 each. He can sell them in two days and incur an operating cost of $500. How much does he have to sell the computers for? Answer - more than $5500.

CircuitCity buys 10 computers for $500 each. It can sell them in two days and incur an operating cost of $500. How much does it have to sell the computers for? Answer - I guess they think less than $5500 of they are going bankrupt.


They need better business analysts and accountants.

[Evo1216 @ Oct 20th 2008 7:31PM]

What the hell are you talking about?

[Alexandre Emond @ Oct 20th 2008 12:31PM]

It is criminal that directors reject high price buyouts (MS vs Yahoo). Share holders always end up loosing tons of money.

[John @ Oct 20th 2008 12:46PM]

Microsoft Offer: $31
Yahoo! Shareprice: < $13

[bandigolo @ Oct 20th 2008 12:49PM]

Not likely criminal for failure to submit to a buyout, but certainly one could make a case for civil liability of the officers. Might be criminal if there was some evidence to suggest fraud.

[rcappo @ Oct 20th 2008 1:57PM]

And customers lose out in the end. It might make companies more efficient (fewer middle management jobs), but the lack of choice in the marketplace is the problem. MS-Yahoo would be no different from what they have now, so how would those two team up to compete against Google. I use Yahoo now (except for Google Earth), but if they merged with MS, I would switch to gmail.

[NicNitty @ Oct 20th 2008 12:38PM]

makes me wonder if after a massive clearance shut-down sales, TigerDirect will expand themselves again... lol

I hope for the best for anyone, but I'm not shy about taking advantage of a deal.

[Tim @ Oct 20th 2008 12:43PM]

So, if Best Buy remains the only brick-and-mortar tech-centric megastore around, will other businesses offer enough competition? I know online beats them almost always on price, but say I need to buy a new router to get back online. Could I trust Walmart, Target, and office stores to provide enough competition to keep me from getting totally gouged?

[Jon @ Oct 20th 2008 12:51PM]

Best Buy's biggest competition isn't Circuit City.

It's NewEgg, Amazon, and Wal-Mart.

[Muu @ Oct 20th 2008 12:47PM]

Dunno how reliable their sources are, but some places are saying CC's already hired bankruptcy lawyers and are just waiting for the holidays to end before they start something drastic.

http://www.bizjournals.com/milwaukee/stories/2008/10/20/daily2.html

[Moby Disk @ Oct 20th 2008 12:49PM]

When I first heard about this I started going out of my way to try buying things at Circuit City. If they die, then Best Buy has no competition (at least in my area) and that would be bad. Even though BB and Circuit City are only a few blocks from each other, I never go to Circuit City. It is, and has been for a long time, a terrible store. That store moved however, so I'll have to see what the new one is like. They really need to reinvent themselves.

[bandigolo @ Oct 20th 2008 12:54PM]

No boutique shops in your area? Although prices may be higher at those, I've never failed to get a price match - especially in this economy.

Otherwise you could always shop via Amazon, which often ships from retailers that aren't mega-chains.

[Apreche @ Oct 20th 2008 12:52PM]

Circuit City is pretty bad, but why are people saying Best Buy is so great? They're just as bad. I buy everything from Newegg and/or Amazon. The only time I would even consider going to one of these stores is if I need something very heavy, like a UPS, and shipping costs are too crazy. I also go to look at products that need looking at, but I would never buy them there. I hope all these brick and mortar retail places go out of business so I can go and buy stuff at wicked low clearance prices. I remember when Media Play went out. It was amazing.

[kjb434 @ Oct 20th 2008 12:53PM]

There 4 stores planning to open in the next year in the Houston area and the word is they are still a go.

[Evan @ Oct 20th 2008 12:55PM]

I guess people are finally realizing what a rip off retail stores are and learning to shop online

[ethana2 @ Oct 20th 2008 1:02PM]

I find that physical stores just don't give me the choices I need, regardless of pricing.

[marcin @ Oct 20th 2008 1:01PM]

so uh if a retailer shuts down its stores to avoid bankruptcy, how exactly will they make any cash? are they just gonna liquidate their assets and... MORE BEST BUYS!!!

[BigTeebo @ Oct 20th 2008 1:07PM]

I remember asking about an ASUS laptop(er, netbook) and the guy thought I said "Jesus laptop". I'm glad I paid off my card there for a TV I paid too much for. I'll go to Microcenter: lower prices, knowledgeable staff.

[Scotty Dont @ Oct 20th 2008 1:11PM]

Again... CC has the exact same price match policy as Best Buy. We will match a competators price and beat it by 10% and we also have a 30 day price change gaurantee. Both companys have ALL the same price adjustment policies. They only difference between CC and BB is the product in which they carry. We carry somethings BB dosent and BB carrys somethings CC dosen't.

[Duke 2 @ Oct 20th 2008 1:14PM]

Interesting- so what's going to happen to the 4yr extended warranty CC sold me on my 52" Sammy for several hundred dollars should the company go belly-up.... or is that a rhetorical question?

they definitely put together the best overall package (over BB) for a home theater system (including Firedog installation), but now this is looking like it may have been a bad decision...