# Circuit City to close 567 remaining US stores



## kwflatbed (Dec 29, 2004)

By MICHAEL FELBERBAUM and VINNEE TONG, AP Business Writers Michael Felberbaum And Vinnee Tong, Ap Business Writers - 5 mins ago

Bankrupt Circuit City Stores Inc., unable to work out a sale of the company, said Friday it will go out of business - closing its 567 U.S. stores and cutting 30,000 jobs.
The nation's second-biggest consumer electronics retailer is the latest casualty of an unprecedented pullback in consumer spending that has driven other brands such as KB Toys, Mervyns LLC and Linens 'N Things into bankruptcy. Experts believe there will be more to come.
"This is the only possible path for our company," Circuit City's acting Chief Executive James A. Marcum said in a statement. "We are extremely disappointed by this outcome."
The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable. Negotiations for an acquisition went past midnight on Thursday, Circuit City lawyer Gregg Galardi said in court.
Two buyers - Mexican billionaire Ricardo Salinas Pliego, who controls a chain of electronics stores in Latin America, and the Golden Gate Capital private equity firm - had been looking to buy the company in a shrunken form, with either 350 stores or as few as 180 stores. But the company couldn't secure the necessary financing or support from vendors.
Some employees were notified Friday that they would lose their jobs and certain stores would begin close-out sales as early as Saturday.
U.S. Bankruptcy Judge Kevin Huennekens gave final approval to the liquidation plan.
"This is a very sad day for management, the employees, customers and the community," the judge said.
Shareholders are likely to receive nothing, as is typical in bankruptcy cases. Circuit City said in court papers it has appointed Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC as liquidators. They will pay a 70.5 percent return on merchandise.
It was unclear what would happen to the company's 765 retail stores and dealer outlets in Canada. Galardi told a judge there are still bids for the Canadian business.
"Very, very sad," said Alan L. Wurtzel, the son of company founder Samuel S. Wurtzel, and the chief executive from 1972 to 1986, board chairman from 1986 to 1994 and vice chairman until 2001. "I feel particularly badly for the people are employed or until recently were employed."
Wurtzel has previously said Circuit City didn't take the threat of rival Best Buy Co. seriously enough and, at some points, were too focused on making a profit in the short term instead of building long-term value.
Credit Suisse analyst Gary Balter told investors that Circuit City's demise will help Best Buy cement its position as the market leader.
"Losing Circuit (City) and what had previously been an $11 billion business, in addition to share gains from other smaller outlets, should help to partially offset weaker consumer spending as well as further secure Best Buy's position as the leader in the space," he said.
Shares of Best Buy Co. rose $2.44, or nearly 9 percent, to $29.58 in afternoon trading.
The liquidation of Circuit City follows the worst holiday shopping season in four decades. People have slashed their spending since the financial meltdown in September as they worry about their job security and declining retirement funds.
KB Toys filed for bankruptcy in December and is liquidating stores. Department store chains Goody's Family Clothing and Gottschalks Inc. both filed for bankruptcy this week - Goody's plans to liquidate, while Gottschalks hopes to reorganize. Industry experts expect more bad news in the coming months as spending likely will deteriorate further.

The Circuit City move will also hurt the nation's malls, which have suffered from the rise in vacancies as other chains have liquidated. But analysts say that the demise of Circuit City, whose stores range in size from 20,000 to 25,000 square feet, will hurt the fortunes of mall operators even more. 
"It will bring to market a glut of big box spaces across the country," said John Bemis, head of Jones Lang LaSalle Inc.'s retail leasing team. "It will have one of the largest impacts on big box real estate across the country." 
Circuit City filed for Chapter 11 in November as vendors started to restrict the flow of merchandise ahead of the busy holiday shopping season. It had been exploring its options since May, when it opened its books to Blockbuster Inc. The Dallas-based movie-rental chain made a takeover bid of more than $1 billion with plans to create a chain to sell electronic gadgets and rent movies and games. Blockbuster withdrew the bid in July. 
Circuit City, which said it had $3.4 billion in assets and $2.32 billion in liabilities as of Aug. 31, said in its initial filings that it planned to emerge from court protection in the first half of this year. 
Under court protection, it broke 150 leases at locations where it no longer operates stores and closed 155 stores in the U.S. in November and December. 
___ AP Retail Writer Anne D'Innocenzio contributed to this report.

http://news.yahoo.com/s/ap/20090116/ap_on_bi_ge/circuit_city_bankruptcy


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## SinePari (Aug 15, 2004)

I may get that ginormous man-town flat screen sooner than I thought! I mean, oh jeez, that's horrible for Circuit City...


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## rg1283 (Sep 14, 2005)

People say its the economy that did these guys in, in reality its over expansion and poor business pratices and crappy customer service. Do I feel bad for the good hardworking people (if their are any there) at the company, yes I do.

Most of the struggling business are getting the Coup de grâce. Places like Tweeter and Circuit City were struggling atleast for the last 5 years.

Certain Bars and Restaurants too, have been struggling. Probably because their food is horrible.


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## Guest (Jan 16, 2009)

rg1283 said:


> Certain Bars and Restaurants too, have been struggling. Probably because their food is horrible.


Looking at the good restaurants, you'd never know there's a recession. Hour-long waits every weekend night.


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## 94c (Oct 21, 2005)

rg1283 said:


> People say its the economy that did these guys in, in reality its over expansion andpoor business pratices and *crappy customer service*. Do I feel bad for the good hardworking people (if their are any there) at the company, yes I do.


When I bought my first computer many years ago in the days of 56K modems, you're absolutely right about customer service. I even bought TV's there.

When Best Buy came to town it was the best thing going. Circuit City sold you the product and then never cared about you after you left the store.

Best Buy may hire kids but at least these kids have a *basic* understanding of what they're doing. They even agreed with you when you informed them of some things.

Circuit City was horrible to the point that I would not go there even if the product I wanted was on sale.

A word to the wise of all these businesses, *customer service matters.*


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## fra444 (Nov 23, 2008)

94c said:


> When Best Buy came to town it was the best thing going. Circuit City sold you the product and then never cared about you after you left the store.
> 
> Best Buy may hire kids but at least these kids have a *basic* understanding of what they're doing. They even agreed with you when you informed them of some things.
> 
> A word to the wise of all these businesses, *customer service matters.*


I know someone who was at Best Buy in Dartmouth about 3 years ago and could not get service. So he decided to walk over to the computer they had there, go to the Best Buy site, place an order for pick-up in the store, then he went over to the customer service counter and picked it up!

Said he got the strangest look from the nit-wit at the counter :lol:


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## OfficerObie59 (Sep 14, 2007)

fra444 said:


> I know someone who was at Best Buy in Dartmouth about 3 years ago and could not get service. So he decided to walk over to the computer they had there, go to the Best Buy site, place an order for pick-up in the store, then he went over to the customer service counter and picked it up!
> 
> Said he got the strangest look from the nit-wit at the counter :lol:


That's pretty bad. I would've at least written a letter...it'd get you a $20 gift card or something.


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## BPD3352 (Apr 18, 2007)

I know exactly what you guys are saying. I went to the Circut City on 140 in Taunton before Christmas. My Wife wanted a GPS and I needed an Ipod for one of the chrebs. I'm looking at the GPS units and since I dont know shit about them, I asked the snot nosed clerk. He was about 10 feet away leaning on a register. "Can you help me with the GPS units?" He doesn't move and says. "Yeah what about it?". I said "whats the difference between this one and that one?" Then his cell phone rang... "Nevermind, sorry to bother you, I'll be on my way."

I was ready to drop $600-700 in that dump, plus the warrantee. 

Best Buy was more than helpful and cheaper


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## NewEngland2007 (Dec 31, 2005)

Google to do my research on the product, Google Shopping search to find the website w/the lowest price, and a few days later the UPS guy shows up with a chipper greeting I'd never get in a brick and mortar store. Returns are usually easy or you can just sell it on Craigslist or eBay if you hate it.


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## toneil100 (Oct 5, 2008)

NewEngland2007 I wholeheartedly agree with you. 90% of my buying is done online. This past Christmas I did 100% online (most with free shipping). Much less stress and aggravation.


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## OfficerObie59 (Sep 14, 2007)

LawMan3 said:


> circuit city always had kind of dumpy atmosphere


Agreed. Plus, it's usually a bit more expensive.

I worked in retail for 5 years prior to getting on the job and had the distinct pleasure of having to go through a liquidation. My bet is, even with the economy the way it is, you're gonna hafta be on top of the markdowns if you want to get a hold of any of the nice stuff like HDTV's. All the good stuff will gone by the time the markdowns hit 30-40%. It all goes quickly because people THINK they're getting great deals (when they probably could've gotten even better deals before Christmas) and get caught up in the flashy GOING OUT OF BUSINESS banners (which, coincidentally, by law can only be posted in the last 60 days before a store closes). Buyer beware.


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## CJIS (Mar 12, 2005)

Both Best Buy and Circuit City suck in my opinion. At neither one of the stores does anyone have a clue what they are talking about. 

So many times I have caught them without a clue and when I catch them I make sure everyone knows it.


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## Guest (Jan 18, 2009)

OfficerObie59 said:


> I worked in retail for 5 years prior to getting on the job and had the distinct pleasure of having to go through a liquidation. My bet is, even with the economy the way it is, you're gonna hafta be on top of the markdowns if you want to get a hold of any of the nice stuff like HDTV's. All the good stuff will gone by the time the markdowns hit 30-40%. It all goes quickly because people THINK they're getting great deals (when they probably could've gotten even better deals before Christmas) and get caught up in the flashy GOING OUT OF BUSINESS banners (which, coincidentally, by law can only be posted in the last 60 days before a store closes). Buyer beware.


Linens & Things jacked-up their prices before the "Going Out Of Business Markdowns" started to appear. By the time there were decent deals, all that was left was polyester sheet sets for a single bed with a design pattern that was an Australian's nightmare.


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## Goose (Dec 1, 2004)

NewEngland2007 said:


> Google to do my research on the product, Google Shopping search to find the website w/the lowest price, and a few days later the UPS guy shows up with a chipper greeting I'd never get in a brick and mortar store. Returns are usually easy or you can just sell it on Craigslist or eBay if you hate it.


It's pretty easy to be chipper when you only have to deal with each customer for only about ten seconds, and they're usually happy to see you. ;-)


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## Mass (Jan 21, 2006)

Circut City still is not giving great deals even though they are going out of business. Their TV's are on sale, which is the same price that you would get anywhere else, and the worst part is they don't give any discount on sale items. I witnessed one person yesterday cancel her purchase after finding out that there was no further discount.
Best Buy has better prices and better staff based on my experience. I bought a 58" plasma today and was very happy with my experience.


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## sdb29 (Jul 17, 2002)

Mass said:


> I bought a 58" plasma today and was very happy with my experience.


Dude!! You bought a 58" plasma today and you're posting on the internet? Turn that sucker on!!


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## rg1283 (Sep 14, 2005)

Whats on TV anyways, but Obama and stupid drug ads?


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## kwflatbed (Dec 29, 2004)

Dam that must be disgusting Obama on a 58 inch screen.


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## 94c (Oct 21, 2005)

rg1283 said:


> Whats on TV anyways, but Obama and stupid drug ads?


I've got a TV tuner card, 22 inch monitor, MassCops, Pizza, and the AFC Championship game at the same time.


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## Guest (Jan 19, 2009)

Circuit City is just a hang out for the Honda Civic w/ Nitro crowd. You might as well have been asking a question to somebody on Revere Beach on a hot Friday night.


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## Mass (Jan 21, 2006)

sdb29 said:


> Dude!! You bought a 58" plasma today and you're posting on the internet? Turn that sucker on!!


hahaha, it's not getting delivered till wednesday. But I have the beer waiting!


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## SinePari (Aug 15, 2004)

I did my research online and found a Sony Bravia 52" for $1700. CC was $2100, Best Buy was $2500, and Sony direct was $2200. Google shopping is the way to go, my friends.


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## BRION24 (Sep 19, 2008)

I guess that I am in the minority with this one. I have preferred Circuit City for years compared to Best Buy. I don't care about the customer service in store because I always go in there already knowing what I want. I just got a keyless entry system installed in my truck at Circuit City for $105 and at Best Buy it was $140.


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