Circuit City files for bankruptcy

[marmar]

via the Detroit Free Press:



Circuit City seeks bankruptcy protection ahead of holidays
By VINNEE TONG • ASSOCIATED PRESS • November 10, 2008


NEW YORK — Circuit City Stores, the nation's second-biggest electronics retailer, filed for bankruptcy protection today but will stay open for business as the holidays approach.

It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a financial reorganization plan.

The Richmond, Va.-based retailer has been struggling as nervous consumers spend less and credit has become tighter. The announcement came a week after it said it would close 20% of its stores and lay off thousands of workers.

The company said it decided to file because it was facing pressure from vendors who threatened to withhold products during the busy holiday shopping season.

Circuit City said it had secured $1.1 billion in loans to provide working capital while it is in bankruptcy.

It had $3.4 billion in assets and $2.32 billion in liabilities, as of Aug. 31.

Circuit City Stores Inc. announced a week ago it planned to close 155 of its more than 700 U.S. stores by Dec. 31. The stores are spread throughout 28 states, including multiple locations in areas such as Phoenix and Atlanta. It is laying off about 17% of its domestic work force, which could affect up to 7,300 people.


http://www.freep.com/article/20081110/BUSINESS07/81110033

[Neshanic]

1. WOW! Did not see that coming. *Eyes rolling* Maybe they should of merged with AIG.

[curse of greyface]

2. WOW thats out of left field... who saw that coming. nt

[KharmaTrain]

3. A Sad Joke...

They just opened a brand new store...rushed to get it up and going at the end of August. They hired a full staff and last week it was announced they were already closing that store. It just irked me about all the people who applied (and there was a long line when they took applications) who now were out on the streets even before they'll probably be able to collect any benefits.

I've long avoided Circus City for its poor selection and customer service, thus I don't mourn this loss...just for those who now face a very long, cold winter. And this is just the start...if this holiday season turns out to be the disaster many expect, we'll be seeing more of these bankruptcies. Trickle down at work!

[marmar]

5. Yeah, I didn't think the customer service could get any worse than at Best Buy....

..... Circuit City proved me wrong.

[Phoebe Loosinhouse]

7. OMG! Mad Magazine parody ad that got their knickers twisted - looky

http://gizmodo.com/5032674/circuit-city-demands-all-copies-of-mad-magazine-with-ad-parody-destroyed

What made it even funnier is when they thought that if they pulled all THEIR copies that would make it go away. Like when Piaget discusses how 2 year olds think you really do disappear when they hide their eyes with their hands.

[KharmaTrain]

10. The Wii Ad Had Me In Stitches...

Earlier this year I promised a local home for disabled people that I was going to get them a Wii...the residents love bowling...and then tried to find one without having to pay a fortune for the thing. Sure enough, my wife had a contact at Toys R Us who was able to grab one when the delivery came in (the damn store only ordered 20 a week) and we were able to get one at cost.

Somehow when I think of magazines, the last place I would think of is Circus City.

Thanks for sharing...

Cheers...

:hi:

[Cassandra]

8. The one near me is touting its Everything Has To Go sale.

Their prices even with the sale are not nearly as good as B&H Photo.
The building they are in here, which I guess they will vacate, also has a Barnes & Noble next door, which is moving to a newer building soon. That's a big space that might become available. I'm hoping Trader Joe's or Whole Foods might be interested.

[KharmaTrain]

11. I See A Lot Of Empty Malls In The Future...

It's already happening in my area. Every week while I'm crusing through Pleasant Valley Sunday, I'm seeing another store going out of business. Most of these places have been hit with a triple whammy...the rise in oil prices earier this year drastically increased their costs, the collapsing market dried up the credit they needed to keep the goods and payroll flowing and the ultimate downturn in consumer spending means they're going deeper in the hole as things get worse.

Sadly, I see a lot of businesses going under in the months ahead. My hopes are this opens the door for small business to get back on their feet first as the big chains all but destroyed what was an important part of our economy. My hopes are things hit bottom sooner than later and Janaury 20th can't get here fast enough.

Cheers...

[Phoebe Loosinhouse]

4. Their stupidity knew no bounds.

Below is what I posted on an earlier thread about them. I think it is instructional.


They are/were the stupidest company in the world and I can prove it

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronic...

Circuit City firing its best salesmen
DAVID LAZARUS

Wednesday, February 12, 2003

Electronics giant Circuit City says it will improve its bottom line by firing thousands of employees and switching from commissions for salespeople to hourly wages.

The thing is, though, that to reduce payroll costs by about $130 million, Circuit City has given the boot to nearly all its top performers -- those who'd been pulling down the fattest commissions as a result of their hustle and hard work.

The remaining sales force is largely composed of workers previously paid by commission whose paychecks were relatively modest. They are, in other words, the company's least productive workers.

skip

But what's really surprising here is that the sacked salespeople -- the ones most responsible for what little profit Circuit City will be reporting later this month -- weren't even offered a chance to take pay cuts and stay with the team.

I remember meeting someone who was one of those top salespeople who was just flabbergasted when this happened who told me the stores would never survive with the dregs that remained. Their death throes took 5 years.

In those 5 years, I wonder how much capital and assets were plundered by those at the top? If I owned stock in Circuit City I'd be taking a look-see

[Neshanic]

6. Really? Are you sure about that? I mean ya know.....

[opihimoimoi]

9. Add them Circle stores and DHL delivery....total 50000 jobs....its getting scarey

[Romulox]

12. Michigan ALONE has lost over 80,000 jobs in 2008. So meh on Circuit City...nt

[Initech]

13. I've come to refer to them as Circuit Shitty over the last few years.

Good riddance. Their stores are very poorly organized and they usually hire people who know jack shit about the products they sell.

[blue_onyx]

14. Won't be long before they close down completely

[lpbk2713]

15. I never had much use for them anyway.

I've been to the local store maybe twice in the past five years.

[greguganus]

16. They had a bad reputation here for running bait and switch scams on their customers.

Every time they had a sale, they were always "sold out" of the items on sale, but were willing to sell you an upgrade of the item you wanted for a few dollars more. There were several complaints filed here with the BBB on this.

[joeunderdog]

18. A friend of mine bought a laptop there that turned out to be an empty box.

When he got it home, all that was in there was a battery. He went right back to the store, and they essentially told him to screw. He's not a guy who looks or acts like he was trying to get over on them, but he got a company line that he was not going to get made whole. He eventually needed a lawyer and months of aggravation to get his money back. Since then--10+ years ago--I have refused to patronize their business. From what I hear, there was a website for people with similar complaints about their (lack of) business ethics. Stories like these have legs and I feel no pity for a company who does not treat its customers and employees respectfully.

[fencesitter]

17. Not surprised

poor selection, non-existant customer service, not very knowledgable sales personel. If I wanted something I might stop in the store to check it out but purchase it elsewhere.

[W_HAMILTON]

19. Anyone know how this would affect extended warranties?

Contrary to what a lot of people said, I had a great experience with Circuit City, and ended up buying my plasma TV from them during Black Friday (I think that's what it's called, the day after Thanksgiving?). A guy at the local place gave me a great deal on the TV I had my eye on. I decided to buy an extended warranty at the time, even though I know everyone says those are worthless, just for the peace of mind. It lasts through the end of 2009.

Will that still be good? I always get confused when companies file for bankruptcy. Circuit City will still continue to operate, right? It makes me a little worried, when it says that it will stay open through the holidays, which implies that it won't stay open beyond that point.