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Electronics retailer Circuit City announced recently that they were going to close 155 stores nationally in efforts to curtail their financial woes. According to a November 3 press release, "the stores identified for closure are located in 55 U.S. media markets, of which Circuit City will exit 12 U.S. media markets." Although not exiting California, they are planning on closing 24 stores in the state, including ones locally in Industry, Compton, Foothill Ranch, Thousand Oaks, Riverside, North Fontana, Pomona, Santa Maria, and Santa Barbara.
However, today's news brings word that the Virginia-based company needs to take their fiscal troubles to the next level, and are filing Chapter 11 bankruptcy. According to the Pasadena Star-News, this "will allow it to hold off creditors and continue operations while it develops a reorganization plan."
Circuit City explained the move via a press release issued today:
The company recognizes that, to achieve these objectives, there is a critical need to create a more efficient chain with a streamlined cost structure. As previously announced, the company is in the process of closing 155 domestic segment stores. This week, the company took action to realign its regional and district support structure commensurate with the smaller store base, which will include approximately 566 stores when the domestic segment store closings are completed. As a further cost-saving measure, the company reduced its corporate headquarters workforce on November 7, 2008. These corporate, regional and district support reductions totaled approximately 700 positions and are in addition to the reductions resulting from the store closings. The store closings and support workforce reductions will result in a combined domestic workforce and store base reduction of approximately 20 percent.Despite the grim news of unavoidable unemployment for that 20 percent, the retailer assures its shoppers that they will take advantage of this time to stock up for the upcoming holiday shopping season and attempt to use these sales to boost their overall standing. Unfortunately for Circuit City, and many other retailers (and those hoping to get some seasonal work), this holiday shopping season; the forecast is for "flat-to-declining" sales levels as 2008 comes to a close.
Here's a list of the stores closing in California:
Photo of the Circuit City store sign in Burbank by Xurble via Flickr
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don't blame the economy for this one. blame poor customer service. when customers get lousy treatment, even a corporate giant can go under. i never met a circuit city i didn't like.
maybe CompUSA will be next!
CompUSA avoided Chapter 11, but the stores in California closed long time ago.
I would put Best Buy with bad customer service also, but I didn't care either way since I price match between the two stores.
I love Circuit City - F* Best Buy. CC always gave me good customer service - with the exception of the door guy. I refuse to allow them to inspect my personal belongings-once you've paid for it, it is yours, consider it a bag or purse, who are they to look at your personal belongings. After several heated arguments the first few times they implemented this "security" measure, they know I don't stop so they don't even bother to ask me - unless it's a new person, in which case I ignore them and they don't chase after me anyways.
CC has great prices and has better warranty service - except the warranty itself is more expensive, which is the reason I didn't buy my tv there last week, I wound having to go down the street to BB and buy it from those bastards. Paying a little extra is fine by me for the service, but I'm capped at $20, for the tv i wound up buying - the warranty would've cost $179 more - and they already knocked off a few hundred to match BB, so they couldn't do anything for warranty.
SO when do these sales start?
NO!! Not the Compton store!
Seriously, when are these deep discounts gonna start?? I called one of the stores closing & was told they were only give 10% on HD tv's - not really a draw there.
20% on dvd's, 20% car audio & i can't remeber what the 30% off was for (i think it was for cameras)
Maybe wait till the final weeks for those markups to go up, especially inventories not needed for their online store.
From what i'm reading and seeing, the liquidators at the closing stores are raising the prices and the non-closing stores are marking off.
Chapter 11 is reorganization. Chapter 7 is bankruptcy which would result in these "fire sales" you're clamoring for.
"we're having a FIRE (sale). OMG it's a crazy FIRE (sale)."
- Tobias
I refuse to shop at Circuit City and I sincerely hope this is their end. This is just desserts after the horrible way they've treated their workers.
Or have we forgotten that they fired 3000 of their highest paid workers so they could hire a bunch of cheapo ones? And lest the pro market parasitism trolls out their think they have something intelligent to say, that's "highest paid" for in-store help. They certainly didn't fire anyone at the executive or management level.
Frankly, the bad PR combined with the shitty customer service they got from the low pay idiots they hired just sealed their fate.
Sadly, unlike actual people fucked by the horrible 2005 bankruptcy bill (Which Obama opposed but sadly, Biden supported,) Circuit city can "restructure" and get plenty of debt forgiveness. The rest of us? Better hope you don't get cancer.
Let's not lose sight of the fact that Circuit City has been getting hammered for years. Best Buy offers better pricing, selection and service in a physical store and Internet stores offer infinite selection and better prices. This is just another example of a bad company that can't survive a downturn.
jmanley