Circuit City Files Bankruptcy
Submitted by
CalculatedRisk on Mon, 11/10/2008 - 6:18am (78 comments)
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seriously?
T'was bound to happe
They were a crappy store when they were at the top of their game.
But wait...CC senior management has decided to apply for a portion of TARP since consumer credit is the lifeblood of this country.
I am in the market for a new computer. Will this help or hurt me? Will they discount their laptops or will they mark-up $500 models to $800 and then have a liquidation sale selling them at for $700?
Damn! I had Best Buy to "win" and Circuit City to "place."
If only they had been more creative in leveraging those service contracts...
then they could have also hit the jackpot at the end of the TARP!
"Welcome to Circuit City, where service is state of the art." Can't get that jingle out of my mind!
I am in the market for a new computer. Will this help or hurt me? Will they discount their laptops or will they mark-up $500 models to $800 and then have a liquidation sale selling them at for $700?
The Mervyn's symdrome. The ads this weekend were for everything 50% off as part of their going out of business sale. Unlike the healthy Kohl's down the street that is regularly 70% off.
Why can't we save CC? They are an important part of america, nobody must fail, everyone must suceed....can we change the tax laws to save them, maybe a singing statement, maybe some money from TARP,,,
OT:
Drudge Report is headlining (in huge red font) a new piece on Bloomberg about the lack of transparency at the Fed. It looks like a lot of media and advocacy groups have gotten on board to find out what's going on.
Time to start with the phone calls to your Reps to get an idea what's on the books. This is horsesh-t.
Bloomberg
Call, e-mail, and fax if you get a minute.
Might be a great time to open a liquidation center.
Per the info linked last week, my local CC was set to stay open.
One of the nicer shopping centers locally is going to become paintball central.
They have Hollywood Video, Linens and Things, Home Depot, Old Country Buffet (Buffet, Inc.) and Circuit City.
Its all good news...AIG gets money from US, China to give money away and fat ass Americans are eating all of their meals at MCDonalds..
I'll call worthless Caroline Maloney on the oversight committee, again.
So why is Bay Area real estate still stratospherically priced with little capitulation given what is coming to tech?
Nothing like a recession to clear out the dead wood.
It's natures way of telling you, somethings wrong ! (with your business plan)
Out of curiousity, what funds/ETF are there to short the Treasury?
@Ho Ho Ho -
They will mark up everything when they liquidate. Not sure how that works, but apparently that's how Hilco rolls.
But....this can't be....
I remember a year ago when they fired all of thier "higher" paid store staff and simultaneously hired them or others back willing to work for less pay. I thought that was supposed to save them.
After reorg, Circuit City to change its name to Circuit Village...because it takes a village to keep every failing business alive with taxpayer's money.
Circuit City + Blockbuster = Circuit Buster
I quit shopping there years ago when they decided to sack all of thier seasoned employees and replace them with low-wage newbies. A morally-bankrupt company that deserves to fail.
I have found my personal favourite market analogy in a youtube video clip (the man is the market)
YouTube - Swiss Rocket Man - Yves Rossy
Wow, can't believe this made the front page at CNBC/Pump Monkey central.
US May Lose Its 'AAA' Rating - CNBC
"The United States may be on course to lose its 'AAA' rating due to the large amount of debt it has accumulated, according to Martin Hennecke, senior manager of private clients at Tyche.
"The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system" and the bankruptcy of the government is not out of the realm of possibility, Hennecke said."
"Hymns for the Lord writes:
So why is Bay Area real estate still stratospherically priced with little capitulation given what is coming to tech?"
Patience, all in due time. Prime real estate in Los Gatos is down over 25% and prices will only continue to decline.
I never shopped there...never been an electronic's geek like so many other American born and bred dopes. Instead, I like ponies.
I hope everyone realizes there are no deals at CC and they end up closing all of their crappy stores...my wife bought a camera for our daughter there 3 years ago, it never worked and they refused to give us our money back, we had to fight with the manufacuterer...good riddance CC!
If only Circuit City were a bank or an auto company or an insurance company or a Government Sponsored Entity or a state or municipality or a Friend of Hank.
Oh, well, I guess we can't bail out everybody.
Oh, well, I guess we can't bail out everybody.
There's only room for two of every kind on this ark.
I quit shopping there years ago when they decided to sack all of thier seasoned employees and replace them with low-wage newbies. A morally-bankrupt company that deserves to fail.
Diana | 11.10.08 - 9:43 am | #
Not to mention "DIVX". Can't think of another company more deserving of bankruptcy. Let 'em burn.
"Friends of Hank" bailout program. I like it.
Carnegie just lost its license in Sweden. This is a BFD in Scandinavia... the Goldman of Stockholm has been piling up wildly risky and secret exposures to who knows what.
Some Swedish banks are turning out to be quite quixotic...
re: Treasuries
enjoy these last few months of bliss
According to the primary dealer survey the treasury runs, new treasuries totaling $1-2 tn will be issued. A very reasonable number considering the amount of private credit Bernanke wishes to offset with public credit.
That's $180bn per month on average for the high side (let's face it, the first $1tn has already been spent). Can you imagine launching 18 IPOs for $10bn companies each and every month next year? In this market?
Money's has got to come from somewhere, and that printing press didn't suddenly become more efficient. The only game plan is to do it as much and as fast as possible to force choices upon global counterparts
No surprise. My guess is Best Buy is a year or two behind them. Everything they sell can be bought for much less online with no sales tax and free delivery.
I bought my RCA alarm clock from CC 2.5yrs ago. I'm very happy with it. Everyone's a negative nelly
According to this guy the taking of junk assets on the government books is the real cause of inflation.
The Real Bills Doctrine
Will we see individual brand stores like cell phones? Most people don't buy online sight unseen.
Don't even think about it. I went through this exercise when CompUSA folded their stores nearby.
They discounted floor models by 10-20% and you had to take them "as is," whether they worked or not.
CC will shuffle a lot of inventory around to liquidators before they'll give the public a deal. If you do buy a PC from CC, wait as late as possible in the liquidation and offer below ask.
Internet killed the newspaper star...
charlie,
expect the internet sales tax loophole to be closed in the near future. there is no reason why it should exist, and states/municipalities need the money.
your best bet is getting a PO box in a state with low sales tax
On another note, did warren sell out of GS?
Not to mention "DIVX". Can't think of another company more deserving of bankruptcy. Let 'em burn.
Good lord, that was a product that had the height of arrogance.
GM, Chrysler, Circuit City, etc... its like a herd of antelopes ... the weak get killed first.
I wonder if they will still be pushing CC producr warranties during the wind-down ?
The problem is quickly deteriorating fundamentals in a Deep (emphasis on deep) Worldwide Economic Recession...some seem to think it's all in our heads.
"Governmental Commitment to Support Economies Should Increase Investor Confidence - RTTNews Daily Market Analysis"
http://www.tradingmarkets.com/.site/news/MARKET%20ANALYSIS/2009750/
I've discussed this with my wife over the last couple of years, as we anticipated the downturn. Brick and mortar is not going away - we thought that was going to happen during the dot.com boom, and it didn't. But what will happen is that a lot of the weaker specialty retailers - electronics, pet food, hardware, sporting goods, housewares - will go bankrupt during a recession like the one we're in. They can't compete with Walmart or the online retailers on price, and the can't compete with the better franchises on service.
My strategy is to wait until it's abundantly clear who lives and who dies, then put some money into the survivors, who are left with less competition for the eventual recovery. Best Buy is looking like the winner of the electronics deathmatch.
-Jaso
ew thread
Yeah he had a 10% gain guaranteed, no?
If Warren brings down GS, screwing the taxpayer who has preferred garbage, will the adoring public lynch him, or sing his praises?
charlie writes:
Everything they sell can be bought for much less online with no sales tax and free delivery.
Welcome to your Retail California...
Such a lovely place... such a lovely place...
Los Angeles County appears to have passed another 1/2 cent sales tax increase and da Governator is pushing another 1.5% statewide in a special lame duck session this week. That brings them to 10.25%. All I've heard is "internet, out of state and gray markets." Maybe DHL folded too early.
Isn't this dandy!!
Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.
HAS THE WHOLE WORLD GONE CRAZY? AM
I THE ONLY ONE HERE WHO GIVES A SHIT ABOUT THE RULES? MARK IT ZERO
.....hmmm...PO boxes ARE available in Nevada - and firms that forward your stuff....
OT re GS:
I have Jan puts. Reggie M valued GS recently at 60. Sell the rumor?
This is not good for those who work there or own stock or rent space or...the usual. But, the comparison between Best Buy's selection, setting, service, etc., was always so much better than CC that it was pretty clear two years ago that CC was headed for extinction. If they had gotten an infusion of capital and restructured to and retrained to compete head-to-head with BB, good things might have happened for them, by which I mean survival, I guess.
Blown Circuit City.
.....so much for "transparency"....
CC has a GRAND opening of a new store here in SWFL.
An aside: the real estate market continues to slide here. The prices I'm seeing here are shocking even to me. Particularly condos. How do you price a unit in a virtually unoccupied building. Maintenance fees....
YLSP writes:
Internet killed the newspaper star...
AND the video star.
Given what we know about Circuit City, any word on the health of
Nobody Beats The Wiz
Topps Appliance City
Crazy Eddie's, or
Silo?
General Motors downgraded to Sell at Deutsche- tgt cut to $0 from $4
stellar timing
If CC isn't around who is going to buy all those flat screen produced in China?
So, when CC and Mervyns try to sell or lease their commercial RE, what happens to the valuations of Target and SHLD?
charlie writes:
Everything they sell can be bought for much less online with no sales tax and free delivery.
Not if you live in New York,
"Items Shipped to New York State
Effective June 1, 2008, Amazon.com LLC will begin collecting sales tax on items shipped to destinations within the State of New York as New York has enacted a new law requiring out-of-state sellers to collect and remit sales tax based on advertising. Amazon has filed a lawsuit challenging the constitutionality of this provision. However, as required by the law, we must still begin collecting New York sales tax beginning on that date."
Amazon Statement On NYS Law Compelling Them To Collect Sales Tax
Anonymous above was me talking about NYS sales tax and internet sales.
Better be really careful if get any gift cards for Christmas - the store you got them for may be gone by the time you want to spend them!
As for Circuit City, they offered higher prices and, after the layoffs of the skilled people, lousy customer service. Gee, I wonder how that business plan could have failed!
One interesting aspect of this BK is Circuit City's creditors; although they probably sold iPods, they didn't sell Apple computers, so the repercussions are going to ripple back on Sony, Panasonic, Samsung, HP. Apple probably got stung with CompUSA and pulled out of CC early.
cash flow related from last week:
The dividend reduction also took place before the government took a stake in the bank in its bid to shore up the financial system, says Robert Stickler, a Bank of America spokesman.
REITs have already made dividend cuts, and more could be coming. Maguire Properties Inc. suspended its dividend in May. A company spokeswoman said the dividend "wasn't being covered by operations." LaSalle Hotel Properties said in October that it would slash its dividend by about half because it anticipated deteriorating trends for the lodging industry through 2009.
A recent report from RBC Capital Markets says more dividend cuts among REITs are likely because of the strains now involved in raising capital.
Investors are best advised, when buying a dividend-paying stock, to weigh the odds it won't ax the payout.
Last week I said this would be the optimal course...lol!
CC wasn't good for much of anything. The redshirts knew very little, and service was bad. No real reason to be except "low" prices.
Years ago I bought a very big, heavy pre-flat screen TV. Car couldn't handle it. CC's delivery service was 'way expensive and would take days. The redshirt said, "Well, don't worry I can get it delivered for half the price ($40). Okay.
Come the time, a truck pulls up to the house -- the redshirt and his buddy in the buddy's beat-up pickup. They took the $40 in cash.
That did the job but -- jeez. To get good service, I had to go under the table, and I didn't even realize it.
As Diana (above) said, "I quit shopping there years ago when they decided to sack all of thier seasoned employees and replace them with low-wage newbies. A morally-bankrupt company that deserves to fail."
Firing your best performing sales people is a bone headed move, and a sure sign of desperation. A small cost savings now, in return for lower sales going forward. Anyone who bought or held the stock after that deserves to loose their "investment".
db
I've hated CC ever since they bought out Good Guys, which was my favorite electronics store. I've hated LNT ever since they bought out Strouds, which was my favorite linens store. I've hated Mervyns ever since they stopped carrying the bras I bought, the underwear I bought, the nicely designed mid-price work clothes I bought, the jeans I bought, etc, etc...
When stores figure out they need to stock what their customers want to buy, treat their employees well, and look at their customer service as important instead of their executive bonuses, they will stay in business again. Kick out the effing Harvard MBAs, replace the crap buyers with people who give a shit how long the stuff lasts, and let's get back to quality merchandise again, for goodness sake. Enough cheap crap from China that I DON'T WANT TO BUY ANYWAY.
RayOnTheFarm writes:
It's natures way of telling you, somethings wrong !
Great song! Loved Spirit back in the day.
Should be played over every bailout request.
Firing your best performing sales people is a bone headed move, and a sure sign of desperation. A small cost savings now, in return for lower sales going forward. Anyone who bought or held the stock after that deserves to loose their "investment".
On the bright side, all the good salespeople were given a chance to find new employment before the job market was flooded with desperate idiots.
"I've hated Mervyns ever since they stopped carrying the bras I bought, the underwear I bought,"
Me, too.
speaking of Mervyn's...the "liquidation sale" prices are worse then before they lost the court action to try and return the inventory to the suppliers. We went two weeks ago and got 60% off some jewelry (XMAS gifts) same stuff is only at 30% off yesterday. Most things in the store are at 30% off now....they will have larger discounts before they close the doors but will have nothing left.
Ciao
MS
Don't buy a PC from Circuit City!!! They sold my elderly neighbors a pc with Windows 98 in 2003!!! He was having a terrible time with it until he finally asked for some help. I checked it out, it was Windows 98! By then it was too late to take it back, so I stuck 2000 on it, some more ram and a dvd-rom and an ethernet card. They're predatory shysters, good riddance. They were the only B&M shop in my area to carry DVD-RAM though. Oh, well.
They dropped Apple, around the time of the 3rd generation of the original iMac.
Their service was never that good. The local CC always had a whiff of used-car-salesman/predatory shyster about it, you felt like you were being played by the staff.
At least Fannie and Circuit went from good to great! So much for datamining