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Circuit City files bankruptcy!


boblin119

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Just heard on cnn that circuit city filed for bankruptcy this morning. Better start using those gift cards! They said that, right now they have enough, to honor the gift cards and pay their employees. Wonder how long that will last?

 

http://money.cnn.com/2008/11/10/news/companies/circuit_city/index.htm?postversion=2008111008

Edited by boblin119
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Horrible timing on their part. Since the majority of thier best deals are in conjunction with a rebate, I will have to think long and hard about whether to risk a better deal there with a rebate or pay more somewhere else without one. If I'm not the only one thinking this way, it could really hurt their holiday sales.

 

It's too bad they have sunk this low. I really like CC. I've actually bought more high ticket items there (65" projection TV, laptop, and desktop) there than at BB, as at least in the case of the computers, theirs were slightly better specs for the same price.

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The small silver lining here is that it is a Chapter 11 (restructuring) filing and they have a commitment for a $1.1B line of credit that will enable them, hopefully, to pay employees & vendors on an ongoing basis.

 

That being said, I am almost certainly avoiding most CC rebates on BF items, which unfortunately, is about half the ad each year.

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http://news.yahoo.com/s/ap/20081110/ap_on_bi_ge/circuit_city_bankruptcy;_ylt=A0LEapbVXhhJkwsBS0Gs0NUE

 

Yahoo says:

 

It said it decided to file for bankruptcy protection because it was facing pressure from vendors who threatened to withhold products during the holiday shopping period. The company also said it cut 700 more jobs at its headquarters, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers.

 

Circuit City filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a reorganization plan. Its Canadian operations also filed for similar protection.

 

"Without immediate relief, the company is concerned that it will not receive goods for Black Friday and the upcoming holiday season, which could cause irreparable harm to the company and its stakeholders," Besanko said in the filing.

 

So its possible items for Black Friday might not come in time.

Edited by bigjimslade
added source of quote
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Guest CS.Dean
We saw this with K-Mart a few years back and they found a brilliant leader who brought them back from the brink. May CC should hire him to do the same for them
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K-Mart was saved, yes. CompUSA was saved, yes. But Circuit City has already had at least one potential investor (Blockbuster, via Carl Icahn) look at the books and withdraw their bid. Also, the current speculation is that their current management has run the company into the ground.

 

If Circuit City is saved, it will be at the eleventh hour, at a very cheap price, and will probably be only in one or two regions. There's still going to be massive layoffs and store closings, just like CompUSA.

 

I really hope that I'm wrong, and that CC does survive, but I think they're done. And with this economy, they won't be the last. Here's hoping that their employees find new jobs quickly.

 

Well the writing was on the wall. I question if I bought an item on BF there and it breaks/defective can I return it?

Best Buy will provide factory warranty service on models purchased from CC that BB also carries. (That flyer is on their Atlanta, GA area location pages; I assume it's on the Phoenix and Kansas City pages as well.)
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They are actually under new management. And it has acted swiftly. I think they have anew CEO who is very dedicated to acting now and not waiting for thing to run it's course. They fired over 500 upper management Friday to make sure that the same boneheads are not in charge.

 

The new credit line enables them to get BF merchandise and hopefully get out of all those bad leases(which are they main problem). If those leases are gone this company can survive and that is a big reason for the BK.

 

Nothing but the 155 stores are closing now and hopefully that will be all thats needed for them to come back leaner and meaner. Hopefully this will be another K-mart.

 

They asked the BK court to honer all Gift cards, warrenties and promotions in stores thata re not closing. As I hate rebates no matter where I shop, hopefully more of thier merchandise will be without on BF.

 

I am betting they will be VERY competitive shopping season.

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There was an article in the Richmond paper yesterday, where CC is headquartered. One of the things they point to is that CC went to "B" class real estate in a lot of markets, thinking customers would go to them wherever they are. Best Buy went into A real estate and better staked out the prime real estate in each market where the populations were growing.

 

CC was also late to put CDs and DVDs in their stores.

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The court has allowed them to walk away from 150 dead leases(leases they have been paying where no store has been for a while)....that in itself is big. So they will save over 40 million just on those leases. Count the new stores they will be liquidating and their leases and a lot of money is now being saved.

 

Now they need to see what stores are in the ebst locations and buy more up to date merchandise.

 

There is room in the market for CC. they just have to be aggressive and train their staff.

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The court has allowed them to walk away from 150 dead leases(leases they have been paying where no store has been for a while)....that in itself is big. So they will save over 40 million just on those leases. Count the new stores they will be liquidating and their leases and a lot of money is now being saved.

 

Now they need to see what stores are in the ebst locations and buy more up to date merchandise.

 

There is room in the market for CC. they just have to be aggressive and train their staff.

I hope so. CC has always treated me well. I usually try to shop there first.

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Best Buy will provide factory warranty service on models purchased from CC that BB also carries. (That flyer is on their Atlanta, GA area location pages; I assume it's on the Phoenix and Kansas City pages as well.)

Thanks, just got to make sure the model I buy is the same.

 

The CC near me is closing for good. Now BB is the ONLY closest electronic store near me. I would have to drive to the next town over to go to Fry's.

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