Circuit City files for bankruptcy, seeks Chapter 11 protection |
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Following, a veritable beating in the New York Stock Exchange, Circuit City released a statement announcing that they have filed for bankruptcy.The second largest electronics retailer in America cited rising competition with companies like Best Buy, Wal-Mart and online electronic retailers like Amazon as the reason behind their poor financial performance. That consumers are also finding it harder to afford their merchandise certainly didn't help any.
On September 29, Circuit City reported a loss of US$ 239.2 million in sales, more than triple the losses of last year. As previously mentioned in another article, November 5 saw them close to twenty percent of their US stores and lay off a proportionate number of their 43,000-strong workforce.
Despite the obvious hardships, Circuit City has announced that they intend to stay in business while they come up with a plan to restructure. In fact, they have sought Chapter 11 of the US bankruptcy laws in Richmond, Virginia today, which essentially allows them to continue running the business and tend to the "reorganization" under the bankruptcy court supervision.
The filing for Chapter 11 was spurred by their suppliers demanding up-front cash for shipments upon getting concerned of the store's declining sales of almost US$ 1,500 in U.S. and Canadian branches.
Good luck, CC! You're going to need it.
Related Articles:
- Rumor: closing Circuit City stores to have clearing-out sale for games
- More depressing economic news: Circuit City shutting 155 stores, to lay off thousands
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Comments [refresh]
Sad to hear about that. One of the few stores that can compete with best buy. Hope that it doesn't end there.
It doesn't because Jon G. screwed up. They filed for bankruptcy PROTECTION. Chapter 11.
That DOES NOT mean they are going out of business. It could still happen but not yet.
For example, Kmart filed Chapter 11 long before the Sears Holdings merger. They're still around. Kohl's filed Chapter 11. They're still around. On the flip side, Mervyns filed Chapter 11 and now they're toast.
It's a waiting game. Either way, online stores are much better then BB anyway.
CC sucks anyways.
I love that store
I do think their employees should be a little more respectful, but their sales are golden.
still sucks. Better stores are going to take it out!
...should be that all CEO's, CIO's, etc. are immediately terminated, along with all of their stock options and departure bonuses. --For *any* company.-- Look at CC's case: because of their dreadful mismanagement, now 8000 or so employees have to look for a job in a tight economy.
You'll note the wicked way they did this, too: they even screwed-up their 'recovery effort'. They tried ditching 20% of their stores and employees first (even though it was widely reported that they were considering bankruptcy). When that had the OPPOSITE effect with investors ....they proceeded with what was likely the "Plan A", anyway.
So, had they just filed for Bankruptcy to begin with .... maybe (just maybe) they wouldn't have had to stiff all those employees.
But, the fact of the matter is merely that the "people at the top" at CC are entirely, 100% INCOMPETENT.
If BB can survive this economy, as well as much smaller chains ....then "competition" and "online retailers" are certainly not the driving reason behind their poor financial performance. --It's not having a valid merchandising strategy. --It's living with an outmoded sales strategy for store personnel (long after they dumped the truly experienced staff). --It's having incredible sales Ads, but not having any stock levels for half a year (in the stores they targeted for elimination).
...All of which is a fault which lies at the feet of those at the top (not the poorly-trained/managed staff in the stores). Unfortunately, just like misguided concepts like the "$700 Billion Bailout", this Bankruptcy (if CC will survive) just rewards the incompetent at the top with a second chance that they don't deserve. ...And even if CC fails at Bankruptcy Reorganization, it will still insulate those same scum from having to "hit the streets" looking for gainful employment.
Thanks for fixing it Jon!!!
The only reason the sales are any good is if people know ahead of time.
Where I live in Florida, even if you hear about the sale first day online and you go to the store that very second before the sale starts, everything is ransacked and you'll honestly find nothing of value there.
That's because there are people who have connections with those that work at the store and know when it's going to have a sale far before we see anything online. They purchase everything there at a higher price seven days before the sale, keep their receipts and then return them for their money back.
I know a person who works there and he says that the employees don't get info on when the sales are going on prior to a few days before release. Only supervisors. So basically it screws everyone over at a chance to get anything on sale.
No idea what he's talking about, my CC always has the sale item left, sometimes until late in the day. Only occasionally had a problem with them. simply search "circuit city insert-date-here flier" on Google and check out next weekend's flier today.
If you get there at opening and they are already out of the item, take it up with management, threaten to file a BBB complaint. They will probably magically make the item appear for you. Advertising an item on sale and not having any of the item in stock is false advertising and illegal.
I have had that problem multiple times with Best Buy, and I have filed complaints about them. If I get there 10 mins after opening I always get the same BS response, "oh we had a big rush, all out". My ass
Sad to hear indeed. I don't quite like CC, but still...
Is this at all similar to what happened to Media Play some years ago?
Man, I loved Media Play...
Good I hope Circuit City goes out of business. I am an IT in my area and I can spin circles around them. Example
I asked them I need DDR2 6400mb with 5-5-5-14 lat. (this was the head of fire dog or what ever they are called) He just looked up at the ceiling with his mouth open like a turkey. Then I asked the assistant manger and he had to pull out a guide to computers. All I wanted to know is if they had it in. This was just one example out of hundreds to thousands that I have experience. That is why I hope they go out of business. Either that or actually train the staff on what they are suppose to know.
"This was just one example out of hundreds to thousands that I have experience"
if the service was so crap, why did you keep going back?
@kupomogli - That's because ONLINE is the LAST top find out. Quit looking ONLINE!!!!
Go to the STORE and get next weekends ad. Buy a news paper and get next weekends ad.
It's not that hard.
I have a better question. If you're IT and you KNEW what you wanted, why didn't you just get it yourself? Why did you have to go through a sales guy that has been trained for NORMAL CONSUMER SALES.
They are NOT suppose to be technical. They are NOT suppose to know as much as a high speed IT guy. Otherwise...... can you figure out what's coming next?
WTF are you talking about? They haven't gone out of business YET. They still need their officers.
Plus, I like how you left out the CFO. The main guy in charge of their financial direction.
If you terminate all the officers then you have NO ONE running the business.
Easy b/c i did not see it on the shelf and did not want to wait for it to come from newegg or tigerdirec. The tech's (specially the Head guy of Firedog: there tech support) should know what ram is and their main purpose is to fix the computers and answer any questions about them. Like upgrades.
I bought GOW 2 there on Friday because they were giving away 1600 microsoft point cards with the game. I was second in line and none of the cashiers even knew what microsoft points were. Plus they didnt have a single points card in the store so the 20 or so people who bought the game with me have to come back when they get them in stock. This special was advertised a week before the game came out and they were completely unprepared. The people there are not really trained about the products they are selling.
"should know what ram is"
They do know what RAM is. Don't change your "STORY". You asked about specific timing. That is and SHOULD be above their head.
"and answer any questions about them"
WRONG!!!!! First of all, YOU couldn't answer ANY question about computers. Neither could I. No one knows EVERYTHING.
So, I take it you COULD NOT "figure out what's coming next?"
In CURRENT news... CC just got a $1.1 billion loan.
They aren't going anywhere.....yet.
good deals at circuit city