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Circut City Is Closing it’s Doors

circuit-city_exterior-store-frontLong-lived consumer electronics store, Circuit City began the process of closing its doors as of Friday, January 16, 2009, when bankruptcy judge Kevin Huennekens approved the liquidation plan. The sales will begin at a 10-30% discount for the liquidation, which should last through March before finally closing the doors.

Circuit City has made attempts to save the company through layoffs of high-paid employees, changes in management, seeking potential buyers, and opening small concept stores. Earlier in 2008, Blockbuster Inc. made an offer of$1 billion to buy Circuit City, but the offer was withdrawn in July. Two other interested potential buyers were Mexican billionaire Ricardo Salinas Pliego and the Golden Gate Capital private equity firm, who were both interested in operating the company at a reduced size of 180 to 300 stores. In the end, these efforts have not been successful in preserving the future of the company.

Circuit City has struggled ever since opening of electronic guru, Best Buy Co., whose stock market shares rose +2.20 on Friday, growing to 29.34 for an 8% total increase. It is also not surprising that this closure for the famous electronics store follows the worst retail holiday season since 1969. Consumers are voicing their opinions of Circuit City in public forums and media to the tune that this closure does not come as a surprise. Many think that Circuit City might still be in business if they weren’t so overpriced in comparison to the competition. Even during the liquidation sale, many items are only discounted 10%. These prices are not even coming close to beating prices at other electronics stores and wholesale distribution stores who also sell products from home theater design as well as home theater installation.

By the completion of Circuit City’s closure, 567 US retail stores and 34,000 jobs will be lost. In Canada, the outcome is uncertain for the765 retail stores and dealer outlets.

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January 22, 2009 - Posted by | Industry News | , , , , , , , , , , , , , , , , , , , , , , , ,

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