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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Bankrupt Circuit City to Liquidate, Let Go More Than 30,000 Workers

UPDATED WITH CIRCUIT CITY STATEMENT:

Richmond-based electronics retailer Circuit City, which filed for Chapter 11 bankruptcy protection in November, is proceeding to full liquidation, a move that would leave the company's more than 30,000 employees out of jobs and end the company as a going concern, according to court filings.

Circuit City has reached an agreement with liquidators to sell the contents of its 567 U.S. stores after failing to find a buyer or secure a refinancing deal. In short, no one wanted to buy Circuit City and no one wanted to lend it money.

Here's the news release from Circuit City, just posted on the company's Web site.

"We are extremely disappointed by this outcome," James A. Marcum, acting Circuit City chairman, said in the release. "The company had been in continuous negotiations regarding a going concern transaction. Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company."

More good news for anyone who still holds Circuit City stock (10 cents per share): "The company does not anticipate any value will remain from the bankruptcy estate for the holders of the company's common equity, although this will be determined in the continuing bankruptcy proceedings."

Circuit City has struggled under poor management and tough competition from Best Buy.

Circuit City liquidators include: Great American Group, Hudson Capital Partners, SB Capital Group and Tiger Capital Group.

-- Frank Ahrens
The Ticker is Twittering!

By Frank Ahrens  |  January 16, 2009; 11:36 AM ET
Categories:  The Ticker  | Tags: Circuit City, bankruptcy  
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Next: Obama: My First Job Is Putting People Back To Work

Comments

I'm sorry whenever someone loses their job, but let's be real: Circuit City's customer service and selection has been very, very stinky for a long time. You can't keep that up and stay competitive in this economy.

Posted by: Route1 | January 16, 2009 11:44 AM | Report abuse

Route1,

I COMPLETELY agree with you.

Posted by: lawgirlguru | January 16, 2009 11:54 AM | Report abuse

But where will their snooty workers go?

Posted by: justhere | January 16, 2009 11:55 AM | Report abuse

Their stores have been stinky, too.

It didn't help that they would have working internet terminals near white neighborhoods that were disabled in, ah, "urban" areas.

When they fired experienced middle-level managers, it was all over. Throw out all of that organizational memory and what do you get? Low-paid dimbulbs!

Oh, and Best Buy? You're next if you're not careful.

Posted by: bs2004 | January 16, 2009 11:55 AM | Report abuse

How many minutes till the White House blames this on Bill Clinton?

Posted by: hairguy01 | January 16, 2009 12:02 PM | Report abuse

There's a reason the customer service is bad: last year, they laid off all the experienced sales help. Then, to add insult to injury, the workers were all told they could reapply at lower wages. Circuit City- a class act all the way.

Posted by: kevinray | January 16, 2009 12:08 PM | Report abuse

Good riddance! The best thing about this recession is that it will result in a long overdue cleansing of the cluttered retail environment. It's called survival of the fittest!

Posted by: niksiz | January 16, 2009 12:16 PM | Report abuse

Darn! I just renewed my service agreement with them - the one that the pushy customer service rep said I needed.

Posted by: CubsFan | January 16, 2009 12:16 PM | Report abuse

I would have rather done business with the al-Qaeda than with Circuit City !!! Their customer service was crap!!

Posted by: beebee11 | January 16, 2009 12:23 PM | Report abuse

-

I can see the the commentors on this article either never read or never took to heart John Donne's famous request:

"Ask not for whom the bell tolls, it tolls for thee."

By the end of the Bush era, we may all be looking for jobs.

-

Posted by: markst | January 16, 2009 12:24 PM | Report abuse

Maybe the reason there's no customer service at CC is that they can't afford it, can't afford to compete with online sales that don't charge sales tax. It's not a level playing field. Remember The Good Guys? They had c.s. up the ying-yang -- great place to shop. As Internet sales heated up, helped by the no-tax break, people would go in there, learn everything they needed to know, then go home and order what they wanted, cheaper, from some guy wearing a wife-beater in a warehouse in New Jersey. So much for the retailer who tries to give service, employs people in YOUR neighborhood and generates tax revenue to fix YOUR potholes.

Posted by: JimC45 | January 16, 2009 12:28 PM | Report abuse

This is most unfortunate for the employees. The CEO should receive nothing, no golden parachute, nada. If the public remembers, these folks fired their top sales people to trim costs several years ago, precipitating the fall. Though on a smaller scale, their pure incompetence and inadequacy is similar to what caused the major Wall Street failures. Let us hope the employees land on their feet, and senior management stays away from any other future managing or board positions.

Posted by: altruisticone | January 16, 2009 12:33 PM | Report abuse

circuit city has been circus city for at least a decade!

Posted by: ftitus_1 | January 16, 2009 12:35 PM | Report abuse

I went into a Circuit City one day last year, picked out my item, and went to the cash register. There were no cashiers at any of the registers. I saw a manager-looking guy walk by and I asked him, "Is the store open today?" He gave me a funny look and said, "Yes." Then I said, "There are no cashiers." He looked at the cash registers and grimaced in disgust. Then he told me to go over to customer service and pay. I only bought the $3.99 DVDs there, nothing electronic.

Posted by: philmphile | January 16, 2009 12:37 PM | Report abuse

I've always had good luck at CC so I'm a little sad to see them go. Best Buy will be even more of a zoo now.

Posted by: koolkat_1960 | January 16, 2009 12:38 PM | Report abuse

Don't you have to believe in evolution to believe in survival of the fittest?

Niksiz: that's just the kind of compassion that will help us all stick together and weather the storm.... How's your job situation, just out of curiosity?

Posted by: TomHRyan | January 16, 2009 12:42 PM | Report abuse

I must say that I have mixed emotions about the demise of Circuit City. In their earlier years they were pretty shady, engaging in frequent "bait-&-switch" tactics by advertising out-of-stock items and then having the sales personnel upsell they buyer. Later I discovered that they were one of the largest contributors to the Republican Party, and so I boycotted them for years.

But then when they pulled that outrageous trick on their employees, firing everyone who had ever performed well enough to get a raise or a promotion, well, that tore it. I used to joke with any of their remaining staff who demonstrated any competence, warning them that they'd better watch out or someone might promote them.

However, I wonder how many retailers, better run than Circuit City, will soon suffer a similar fate. I fear that the maladministration of George W. Bush has pushed us over a cliff, and so far it doesn't seem so bad because, as we are still in the process of falling, we haven't yet hit the ground.

My chief concern is that the end of Circuit City leaves Best Buy in a near-monopoly. Thank God for Internet shopping. I just LOVE that no sales tax thing.

Posted by: FergusonFoont | January 16, 2009 12:43 PM | Report abuse

This is a sad story but it's reality. Unlike with the banks who need to fail but are being propped up for no reason, CC is paying the price of poor business practices. You need a cushion, a safety net, namely, money in the bank. Check out GloomBoom.com - it will make your day!

Posted by: GloomBoomDotcom | January 16, 2009 12:46 PM | Report abuse

The Circuit City near me (Springfield, Oregon) always had much better customer service than the Best Buy a few blocks away. The staff at BB had no idea what they were talking about, acted like they knew everything, then acted like you were an a-hole for even asking a question in the first place. At least the Circuit City staff were nice... Good luck to all you jobseekers...

Posted by: Karma2 | January 16, 2009 12:47 PM | Report abuse

The anatomy of a business bankruptcy:

1. Circuit City's top executives are neither black nor hispanic.
2. Circuit City doesn't hire massive numbers of illegal immigrants.
3. Circuit City executives haven't given millions in campaign donations to the d-crats.

Consequently, Circuit City doesn't meet the criteria for a taxpayer bailout defined by the d-crats of congress.

Posted by: LoonyLeft | January 16, 2009 12:50 PM | Report abuse

It's a darn shame that the corporate "leaders" ran a good company into the ground. CC used to be a great company with employees who could actually help a customer.

Posted by: doobrah | January 16, 2009 12:51 PM | Report abuse

Recently I went to CC to buy a GPS. The sales people were really helpful, but and rang the sale up at one of the remote terminals. But then there was no paper in the printer so the sales guy took me over to customer service where I had to wait in line for 20 minutes to get my receipt printed. I could not just walk out because they stop you at the front door to see your receipt. The "customer service" person was slow as molassis and that was the last time I bought something at CC.

Posted by: zuby09 | January 16, 2009 12:51 PM | Report abuse

Buy something at Circuit City and the other sales reps make fun of your purchase.
When you buy a service contract and the item breaks they tell you to call the manufacturer. Everybody at that company is getting what they deserve. Good riddance and I hope they starve during this recession. Not starve to death, just really weak so that I can kick them when they are down.

Posted by: Moderation | January 16, 2009 12:53 PM | Report abuse

Long live Radio Shack!

Posted by: ATVfanatic27 | January 16, 2009 12:54 PM | Report abuse


This is like an episode of Earl.

It's karma, man.

A buddy of mine was in the group of experienced Circuit City sales people who were sacked a few years ago to bring in cheaper labor.

What goes around, comes around.

When's the sale?

Posted by: tony_in_Durham_NC | January 16, 2009 12:55 PM | Report abuse

TomHRyan: Very safe and sound, because my organization is properly managed and thinks long-term.

Maybe if the US had more blunt truth and accountability for bad decisions and poor judgement, instead of endless excuses, we wouldn't be on such shaky ground.

Posted by: niksiz | January 16, 2009 12:56 PM | Report abuse

Circuit City was NEVER a great company. Maybe compared to the business they replaced in the Washington area, Luskin's, they were OK, but they always engaged in nastiness worthy of those streetfront electronic stores in Brooklyn and Manhattan.

And as for that bizarre comment by "LoonyLeft" a couple of posts above, no retailers have been bailed out no matter who they employ or which party's campaign they donate to.

The bailout of the auto industry was necessary and completely just and appropriate. They depend for their saies wholly on their customers' ability to obtain credit, and when that dried up they found themselves in a very real need for help. If we let our primary industries get taken over by foreign investors, it will be a very long time before we recover, if indeed we ever do. We NEED to rebuild, not destroy, our manufacturing sector if any recovery is ever going to occur.

Posted by: FergusonFoont | January 16, 2009 12:58 PM | Report abuse

Almost six years ago, Circuit City's chairman/president/CEO Alan McCollough announced a streamlined approach to wages at the store level.

Fire the senior sales people, bring in the inexperienced and no more commissions on sales or what we call "pay for performance."

According a a Dunn & Bradstreet publication. AllBusiness, the source "Twice" reports:

"The ability of people to sell is not based on how they're paid," McCollough said. "If you have good people and set the expectations, they can do the right job. It's more about expectation than compensation."

At learned a long time ago, you pay people for their performance, not because they sit around with their thumbs up their collective butts and drawing a check, just for breathing.

Circuit City which was a great place in the 80's and 90's, turned into a morally and socially depressed place to shop, due to poor management at the corporate level.

Posted by: Computer_Forensics_Expert_Computer_Expert_Witness | January 16, 2009 1:02 PM | Report abuse

I worked for cc for 13 years, back in the day it was a great company to work for. Rick Sharp was ahead of his time, after working for sears and home depot the last 10 years, I cannot say enough about their dps system, inventory contol....so sad

Posted by: dsbr98 | January 16, 2009 1:04 PM | Report abuse

Some info: Circuit City "Going out of business" Sale starts saturday and will last until 31 March. Also, the website will be shut down over the weekend (Warehoused items will probably not go to stores to be liquidated.) Gift cards will be accepted during the liquidation (if you gave someone a card from the City as a gift, tell them to redeem it before 31 March). Obviously, like the Tower liquidation, the better deals will come towards the end of March, but inventory should be depleted by then as well. It should be a good time to go sccavenge hunting for deals. I plan on doing some pre-sale browsing tonight as the store across from PG plaza is on my route home.

Posted by: prokaryote | January 16, 2009 1:32 PM | Report abuse

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