Circuit City files for bankruptcy

Even after shutting down 155 retail stores and announcing plans to cut around 17% of its 43,000 employees, Circuit City couldn't avoid the dreaded bankruptcy court. Today, the Virginia-based company (along with 17 affiliates) petitioned for Chapter 11 protection in Richmond as it attempts to survive under the crushing pressure from Best Buy / Walmart. Beyond that, details about the outfit's future are unclear, though Best Buy has reportedly stated that it "might take over stores that distressed rivals close." Please, no.

[Via Bloomberg, image courtesy of AFSmith; thanks Daniel]

[GoCarnivore @ Nov 10th 2008 8:20AM]

There goes my job application.

[Flashpoint @ Nov 10th 2008 8:49AM]

When I was in college years ago, I worked for both CC and BBY for a full year. In fact, many of the managers that left Circuit City got jobs in BBY.

Circuit City simply couldn't compete with BBY because of BBY's size and volume. BBY stores such as 483 in Rego Park, average $1 Million a day and they constantly tune their stock to offer everything they can.
Circuit City carried more than Walmart, but now that we've come to a time when people aren't afraid to buy laptops and plasma TV's in a grociery store, the niche CC occupies has increasingly come under attack by Walmart, PC Richard, and numerous other retailers.

R.I.P

[The Joker @ Nov 10th 2008 9:34AM]

I knew a guy named Crazy Eddie who lived in Circuit City in the proud nation of CompUSA. He had a friend who people called "The Wiz" who was a real Egghead and lived in nearby Computer City.

They're both dead.

[OneLove @ Nov 10th 2008 11:49AM]

Black Friday at circuit city is gonna be fun!

[bandigolo @ Nov 10th 2008 12:40PM]

What is BBY?

[bandigolo @ Nov 10th 2008 12:43PM]

does the Y differentiate BestBuy from Blockbuster? Lame posts, I know.

[SOOPERGOOMAN @ Nov 10th 2008 12:55PM]

Two words: HA HA!

[MasterCKO @ Nov 10th 2008 1:57PM]

BBY is Best Buy's stock ticker. BBI is Blockbuster's. People frequently refer to commonly known public companies by their stock ticker, say if I were talking about Ford, I might say 'F' or AT&T, I might say 'T' etc.

[happy_penguin @ Nov 10th 2008 2:01PM]

In the 1990's, I remember Circuit City being a bit more upscale than Best Buy. For this reason, I often chose to shop at Circuit City rather than the dumpy by comparison Best Buy. Circuit City carried somewhat more upline products, and even a few more upscale brands in a much cleaner and more stylish environment. Then something happened and all of the sudden Best Buy started to remodel, expand and build more stores. I think their decision to stay a bit downline with lower prices paid off and they were able to take advantage of their position to crush the competition. It's a shame. I don't like to see any company fail.

[BananaBoat @ Nov 10th 2008 3:02PM]

Circuit City never got around to realizing that keeping their stores stocked, and keeping the customer happy, were the keys to success. Bestbuy, no matter what you say about them, keeps most of their customers happy, most of the time. They also constantly keep a ton more stock of a more expanded selection of items.

The only example I can think of is this: The day I bought Halo 3 ( launch day), I first went to Circuit City to get the limited edition because I was getting a free gift for getting it at Circuit City. I walked in the door, in the pouring rain, and it was like the game wasn't even launching. I went to customer service, and finally found one manager out of a store of 20+ employees that knew what Halo 3 was, and she took me back to the customer service counter, and opened a brand new cardboard box full of the game. She got me one out, rung it up, and I was on my way. After the ten minute drive back home, I found that my discs were scratched to hell, and that I needed to take it back. I went to circuit city, and the manager didn't think that the scratches were serious, so I had to wait for her manager (The GM, I guess) to walk his ass to the front of the store, to help me. He decided that she should just get me another copy, and I agreed, but I asked her to open it before I walked out of the store with it (remember, it was a blinding rain outside). She did, and it turns out that those discs were scratched as well. 20 or so opened cases later, and he decided that it was hopeless, and that my options were store credit....and...store credit. A half hour later, after much screaming at the top of my lungs, I finally got a cash refund. I went to my car, drove to Bestbuy, and do you know what the first thing they said to me was when I walked in the door? "Hey, are you here to buy Halo 3?", I said yes, the limited edition, and she said "Oh, we've been having problems with scratched discs, so we've taken the liberty of finding two unscratched discs and pairing them for your convenience" I about boned the sales lady right there on the spot. It has been clear to me ever since that Bestbuy gets it, and that Circuit City doesn't (could just be my Bestbuy, your mileage may vary).

It's no surprise to me that Circuit City is bankrupt.

[Flashpoint @ Nov 10th 2008 5:25PM]

Onelove

"Black Friday" at Circuit City this year will simply mean THE LIGHTS WILL BE SHUT OFF by Con Edison.


Bannanaboat

After working for BBY and CC, I'll just say that BBY was determined to copy Walmart's customer service strategy. CC waited too long to do this.

I always liked Circuit City more because on average, they tended to sell things cheaper. BBY beats you over the head on everything by adding a penny here or a dollar there. BBY for instance marks up their generic chinese made "Dynex" stuff 300%! according to my store manager back then.

I think the biggest problems the retailers will have is that there are no new video game systems creating holiday rushes and now laptops and computers are dirt cheap.
BBY and CC don't make ANY money selling a 360, DS, PS3 or any other system. They make their money trying to sell you extras like warranties or cables or anything they are allowed to mark up. There really aren't any major holiday rush items this year and people are going to do much less shopping due to the recession and job loss.

Consumer spending is going to be down more this year than its been in the last 25 years according to the news.

[BananaBoat @ Nov 11th 2008 2:49AM]

Bestbuy will weather the storm because of the gigantic lack of competition now that CC is closing a ton of stores. It's going to be a very harsh year for retailers though, I don't think there is any doubt about that.

As for copying Wal-Mart's policies, I wouldn't know. A friend of mine used to work for Bestbuy, and he basically told me that their profit margin items are expensive TV's, anything from Geek Squad, and cables. He used to get us all cheap as dirt USB/Ethernet/etc cables with their discount off of the invoice price (as opposed to the retail price) which for a 20 dollar USB cable meant paying about a buck fifty. I couldn't believe it.

It would be nice if Bestbuy wouldn't try to pressure people into paying for ridiculous things like "maintenance" on a brand new computer to "speed it up" as if a new computer wasn't supposed to be fast enough on it's own. That said, since I'm immune to their BS, it doesn't bother me as much, and I don't find it to be a huge inconvenience when I have to tell the cashier that I do not want to purchase a subscription to a magazine.

For now, I'm still one of those people that will pay a little bit more to buy items like a TV from a brick and mortar store. The luxury of being able to just take the darn thing back if it breaks, instead of having to ship it back and then wait, is enormous. I buy from Costco for their insane "return it whenever the hell you want" policy, but if they stopped that policy, I'd probably go over to Bestbuy. Bestbuy has replaced Sears (R.I.P) as my store of choice for washers/dryers/fridges/etc though, so it has my loyalty as far as that goes. I'd say they are in a strong position against Wal-Mart, considering that the only other big electronics retailer is now circling the drain.


Then again....if Circuit City wants to sell me a Kuro at 50% off, I'd be more than willing to take it off of their hands.

[lettcco @ Nov 11th 2008 6:38AM]

@ bananaboat:

Is she so ugly that you are boning her to show your appreciation?
In that case you should gotten the legendary edition so you can put the helmet on her

[Mike10010100 @ Nov 10th 2008 8:21AM]

No! Not circuit city! Especially with the day after Thanksgiving coming up! They had some of the best prices on storage!

Grr. Variety is good when price hunting. This will definitely hurt my haul this year!

[Jon @ Nov 10th 2008 8:55AM]

I don't get it. They just built a brand new (very nice looking) Circuit City near me, right next to a huge expensive outdoor mall that's also being built. It just opened like a month ago, and now this? WTF...

[Loban @ Nov 10th 2008 9:44AM]

Agreed, CC has always had the best Black Friday deals.

[JohnTitor @ Nov 10th 2008 10:02AM]

well doesn't this mean they might have a really good black friday this year?

anyway I'd think it would be awesome for NewEgg to buy some of their stores, kinda like how TigerDirect took some CompUSAs, but hell I wouldn't want NewEgg to lose their reputation

[Sergio Pereira @ Nov 10th 2008 2:18PM]

Please, don't wish NewEgg did that. That would mean paying sales tax even when buying online. I don't buy at Target Direct because of that.

[Ghen @ Nov 10th 2008 2:34PM]

Newegg ships to me next day or 2 days even with the free 3-7 day shipping. They've never let me down and always have better prices than -ANY- big box store (except rare rebate deals). There's no reason for me to step in a CC or BBY anymore. Ever.

Except to show off my leet guitar hero skills to people I don't know.. that never gets old.

[Electromodo @ Nov 10th 2008 6:49PM]

Guys, relax and read the letter of CC CEO:
http://www.circuitcity.com/ccd/genericContent.do?oid=231769

Looks like we are fine at least for holidays. And for the warranties. And hopefully, formore years to come.


@Ghen
Not everybody is like you, many people (including me) like to see the actual product before buying. Especially TVs, laptops and such.

[theshaner @ Nov 12th 2008 12:57AM]

@Ghen: I like to stop in for the aesthetics. BBY allows me to see the product, and then I buy it online for less. Thank you BBY!

[inteller @ Nov 10th 2008 8:22AM]

so does this mean ALL stores are going out of business now? Black Friday might come a little early this year :)

[Muu @ Nov 10th 2008 8:31AM]

It would depend on how they plan to recover from Ch11, no? Kmart filed several years ago, and while they closed many 'marts including those closest to me, many shops (presumably in profitable areas) stayed open.

[Xoyuji @ Nov 10th 2008 9:35AM]

@ Muu
that was a funny thing Kmart filled Chapter 11 then turned around and brought Sears then changed there name to Sears

[mike @ Nov 10th 2008 11:15AM]

No, KMart is not under the Sears name here but they have a small selection of Craftsman stuff.

[Xoyuji @ Nov 10th 2008 4:47PM]

@ Mike

Yes they did, The company Kmart Holding Company changed there name to Sears Holding Corp after the purchase of Sears so infact the name did change what are you talking about. The stores are still called Kmart & Sears but each sells the others products; some Sears became Kmarts and some Kmarts became Sears and few closed.

[Jeffrey @ Nov 10th 2008 9:26PM]

i hope mine stays open, and if it doesn't everybody else is screwed because i live in metro Richmond... i would think our stores would be the last to close

[Pepsipoint @ Nov 11th 2008 9:47AM]

And that's why Nike pulled sneakers from Sears. I guess they didn't want the nike brand in a store like K-Mart.

[Boinkie @ Nov 10th 2008 8:22AM]

Who didn't see that coming...

[VeganFreak @ Nov 10th 2008 8:26AM]

Wow, this sucks. I don't even know what to say. Best Buy usually has higher prices so... anyone care to give me any insight?

[inteller @ Nov 10th 2008 9:03AM]

who cares if CC had lower prices than BB.....it is 2008 and if you are still buying retail from B&M you are FAILING IT. bankruptcy fire sales on the other hand, are an exception!

[Andir3.0 @ Nov 10th 2008 9:07AM]

It's the natural state of free market capitalism my friend. Those that undercut too much will eventually fail. There's a balance in the economy of success and failure. If Circuit City, like many people in our society unfortunately, didn't plan for bad times... then they fail.

[bill cant fart @ Nov 10th 2008 4:19PM]

@inteller
B&M stands for "Bowel" and "Movement"!!

[ombraweb @ Nov 10th 2008 8:27AM]

I wonder how that will effect "The Source" stores in canada?

[jorvay @ Nov 10th 2008 8:42AM]

They'll be empty...just like they always are.

[jorvay @ Nov 10th 2008 9:56AM]

Just found this article on the CBC news website:
http://www.cbc.ca/money/story/2008/11/10/intertan.html

Sounds like The Source by Circuit City here in Canada is in the same boat.

[Good_Bytes @ Nov 10th 2008 10:28AM]

Oh man, don't tell me you buy stuff form there.
I worked there for 2 weeks and left (they thought i worked for free... anyway)
20$ cables...store cost 0.10$ NO JOKE.
And like my manager said to me when I worked there "If you buy teh store brand [nextech/centrios] and you go home and it works... it's a manufacture error, this how bad it is."

[JOnZ @ Nov 10th 2008 12:03PM]

If The Source is closing (AKA Radio Shack) will be a great day for Canada.

[Dexter @ Nov 10th 2008 1:00PM]

@JOnZ
The source is owned by Circut City and it has been since 2004, They stoped calling there stores Radioshack in 2005 when a court ordered them to stop using the Radioshack name.

[ben @ Nov 10th 2008 3:39PM]

Dang! Guess all we have for tech stores now is FutureShop... There are those times where you just NEED a cable that FutureShop doesn't have (Got a serial cable from The Source a few weeks ago). I have to agree if you go to www.dealextreme.com you will find Nexxtech items without the logo, found the SD card reader on there that I have for $4 (Got it for $25). If it closing means that I can snag a VERY good deal on something, I am all for it!

[Kwirky @ Nov 10th 2008 7:55PM]

As much as I dislike TheSource by Circuit City, I believe their closure leaves BestBuy (who owns Futureshop anyway) as the only national electronics retailer. Electronics prices in Canada are bad enough, I wonder how much worse they'll get with a BestBuy monopoly.

[tom @ Nov 11th 2008 12:10AM]

the source stores and the parent company, intertan are turning a profit. It would be kind of stupid to close a company that is making money. Plus, what other electronic company has 700+ stores accross canada, including markets where there wouldn't be a best buy or futureshop for miles. and a lot of source stores provide better customer service and even prices than a lot of hte other places.

yes, there is a high markup on cables, just like anywhere else other than a dollar store.

[the movielife @ Nov 10th 2008 8:28AM]

Now that you mention it, their stock was kind of low last week.

[Gabe @ Nov 10th 2008 8:29AM]

this is just one step closer to a monopoly for Wal-Mart...

[squiggleslash @ Nov 10th 2008 11:47AM]

Yeah, it's awful how Wal-mart is forcing small local operations out of business, like, er, Circuit City.

Seriously though, any news involving massive job losses is sad. I seriously hope the economy recovers fast.

[Fry Guy @ Nov 10th 2008 1:06PM]

Massive job layoffs? I think CC only employs like 2 people anyhow, and they're both in the back room screwing around with the pricetag gun.

[Lowest Ranked @ Nov 10th 2008 1:33PM]

Do you guys remember Sound Advice?


Me neither.

[Open @ Nov 10th 2008 8:36AM]

I am so glad to see Circuit City go under. I've worked directly for them and I've contracted for them. They tell their employees to lie to their customers and expect someone else to fix the problem. Besides with the net why bother even shopping at a regular store when you can usually find better prices online?

[Xoyuji @ Nov 10th 2008 9:42AM]

Most people shop in stores because they want something now, some dont trust websites or dont like to pay for shipping or that its hard to return stuff since they dont want to pay for shipping to them and then shipping it back if it doesnt work

[Picviewer @ Nov 11th 2008 1:52AM]

Yes buying off the net really helps when at 8pm at night a video card/monitor/hd/tv-tuner dies and you need to run out to the only store at that time that stocks the prefered brand you like because your system needs to be back up and running in 2hrs tops. So yeah go order off the net if you don't need a part asap.