Circuit City to close 567 remaining US storesPublished - Jan 16 2009 12:11PM PST | AP
By MICHAEL FELBERBAUM and VINNEE TONG - AP Business Writers
Bankrupt Circuit City Stores Inc., unable to work out a sale of the company, said Friday it will go out of business _ closing its 567 U.S. stores and cutting 30,000 jobs.

The nation's second-biggest consumer electronics retailer is the latest casualty of an unprecedented pullback in consumer spending that has driven other brands such as KB Toys, Mervyns LLC and Linens 'N Things into bankruptcy. Experts believe there will be more to come.

"This is the only possible path for our company," Circuit City's acting Chief Executive James A. Marcum said in a statement. "We are extremely disappointed by this outcome."


The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable. Negotiations for an acquisition went past midnight on Thursday, Circuit City lawyer Gregg Galardi said in court.

Two buyers _ Mexican billionaire Ricardo Salinas Pliego, who controls a chain of electronics stores in Latin America, and the Golden Gate Capital private equity firm _ had been looking to buy the company in a shrunken form, with either 350 stores or as few as 180 stores. But the company couldn't secure the necessary financing or support from vendors.

Some employees were notified Friday that they would lose their jobs and certain stores would begin close-out sales as early as Saturday.

U.S. Bankruptcy Judge Kevin Huennekens gave final approval to the liquidation plan.

"This is a very sad day for management, the employees, customers and the community," the judge said.

Shareholders are likely to receive nothing, as is typical in bankruptcy cases. Circuit City said in court papers it has appointed Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC as liquidators. They will pay a 70.5 percent return on merchandise.

It was unclear what would happen to the company's 765 retail stores and dealer outlets in Canada. Galardi told a judge there are still bids for the Canadian business.

That store never made any real profit.

So they're gonna start close-outs as early as Saturday?
Guess, I'll go and see how good their close-outs will be, hopefully they sell close to cost.

I can't say that I was a regular shopper,but I'm still sad to see them go.

Virgin Megastores will begin very shortly, the NYC locations are getting ready for closure, there hasnt been a word yet if they will go into Liquidation or they will just close the doors. And Best Buy is doing a "consolidation" of their Music selection, which already was smaller.

lastdecember said:

i've already seen a couple of virgin megastores close, and of course tower records. i know they're the big mean evil retail empires that overcharged on their product, but it's still kinda sad to me.

Anxiety said:

retail didnt overcharge for the product, thats the thing that no one never really understood unless you were involved with buying from labels. LABELS overcharged, as of 2006 labels were charging 12.69 for new releases to buy from the label, so how can a store that sells really only music sell cheaper than that and expect to stay open? Retail stores have to pay rent, electricity, and various other things and well those things called EMPLOYEES. The only reason that Best Buy could survive is the fact they are overcharging you on everything else from cell phones to tv's which is a margin gainer for them. Best Buy loses about 3 dollars per new release, which is why in their "new release flyers" you are not allowed to walk into a best buy and buy more than 3 copies of a new cd. And if anyone has gone to best buy lately you will have noticed the "reality" happening with them and pricing, they are no longer going 9.99 on a cd longer than a week, and alot of new cds at times are 13.99.

They sometimes had good prices on cd albums. Overall this is why the music business is finished as we once knew it,
With basic needs like food, heat, mortgage, rent, etc. - no one is on spending money for cds, especially when the shit sounds wretched.
CDs should never have cost more than $10 each, including tax. Any day, any place a customer should have been able to go to Tower, Virgin, Best Buy or Circuit City and get 2 cds fro $20.00, and still get some coin change back.
Oh but no, too many greedy labels, and over bloated recording acts wnated $18.98 per cd and with tax sometimes you'd be spending close to $21.00 per cd.
Bye Circuit City...I do miss Tower, thet had some great imports.

lastdecember said:

all i know is, i could buy a CD at an indie store for 12.99 or 13.99 and see it at tower or virgin for 17.99 or even 18.99 (for a single disc). i'd think the indie store would have more of a burden with those things called employees than a huge corporate chain. i'm sure i don't know nearly as much as you do on this, but i do know what i see, and how those things look, and how those appearances lead to the choices i make with my wallet.

How does Radio Shack stay open? All they sell are batteries, headphones and remote control cars. I thought they would have went out with the Wiz.

Anxiety said:

New cds would always sell for 12.99,13.99 at tower,virgin,goody, because that was cost. After a sale was over the cd would go back to its "list price" set by the labels, which is 17.98 generally at that time. The reason the stores like those named had to sell at that price is that was their only margin to make. no one is going to tower,virgin or sam goody, for things like tvs,cell phones or washing machines, those items are Best Buys "cash cows for margin". Indie Stores rarely have many employees, their are cd stores here in nyc where 2-3 people work there. Tower Records, Virgin,and Sam Goody on average, would have about 30-50 employees on an average stores payroll, and probably 10-15 on a given day. "Indie stores" also generally deal with One Stops, not labels, which is different, because of "being able to return product" for Credit. Retail Stores like those mentioned lose alot of money when a cd doesnt sell and they try to send it back to the "label" direct. They may pay 12.69 and up for the disc, but if it doesnt sell, the credit they get from the label is less than half. I know the publics perception, and it is what it is, all i can say is you will soon see the disappearance of the "bargains" spoken of and the closure of alot more music outlets, especially "mom and pops". Soon it will be only Walmart, and a very restricted catalog.

JackieBlue said:

I've often wondered that, too. They've been around forever.

30,000 paychecks gone like that.

mynameisnotsusan said:

That's what I was thinking. I always think about the employees.

wildgoldenhoney said:

I'll be going tomorrow to buy the other Jacksons remaster

there wont be any good deals yet though. i guarantee you they are marking prices up now, so that tomorrow when you see "XX%off" you really think you are getting a deal

wonder if I can get a deeply discounted 120GB iPod Classic? i was going to buy a certified refurbished 160GB one from apple.com, but if i can get the 120 that they've got out now for dirt cheap, my decision has just been made for me.

bboy87 said:

That's most likely where you would be able to find a deal.


Plus, I need an SD card and maybe a portable hard-drive,
although I'm still gonna compare the prices with Best Buy down the street,
just to make sure I'm getting a good deal at least.

It kinda reminds me of Crazy Eddie when they went out of business in the 90's. I missed their commercials.

All i can say is if you are looking for "deals" you are going to have to wait. The Liquidation process takes 3 months, and the "liquidation" companies are there to MAKE MONEY, so you will basically see 10-20% sales off the bat, but NOT on top of regular sales, all regular sales are cancelled. Liquidators are there to sell everything but they want the most they can get. Dont walk in day one expecting to get something that was 50 dollars for 10, not going to happen.

On a side note, Liquidation is a depressing thing, i could not even go into Tower on 4th and broadway, because that was the staple of NYC, also because i had just gone through liquidation earlier that year. As for deals though, we HID the stuff we wanted most and then bought it all near the end, we were like Fuck everyone, if we gotta go through this shit, we are the ones getting the best stuff.
[Edited 1/17/09 9:19am]

lastdecember said:

You used to work for Towers?

wildgoldenhoney said:

Sam Goody in Brooklyn. I started at the lowest rung and worked up to buying consultant and worked with the labels breaking artists and new realeases etc.

lastdecember said:

Interesting.
No wonder you're so knowledgeable in regards to music and new releases.

Ummm are they going to have a sale before they close?

trueiopian said:

Well I will hurry up and go there if they do. It's such a shame to see Circuit City close. I didn't shop there as much as I did with Best Buy but it was a cool store. They had just opened up a store near my house not even a year ago and now it might be closed already. I feel sorry for the employees. I hope they will get on their feet soon. This is just sad.

What sucks is that with more stores closing, there will be less competition and thus higher prices in brick-and-mortar stores.

You're going to have to go online for the deals . . .

Se7en said:

You are basically gonna have to wait for "used" items to pop up on sites like Amazon, if you want the physical cd, or you will have to get the "faceless" download from iTunes.

The thing is that there never should have been competition in the first place, everyone should have had set cd prices, this is what the video game industry does on all game releases and that industry doesnt have issues. Labels only cared that they got the outrageous price for the cds and didnt care that the stores would lose tons of money to sell their product, and that is why you will have nothing left in terms of choice.

Hell, I went in Circuit City two years ago in my area and asked them then, "are you going out of business". The had a limited number products of on the shelf a small sale staff and the store aesthetics were dated and dark.

Circuit City painted itself in a corner when they decided to stop selling CD/DVD/software and appliances years ago, which limited their foot traffic. Plus, they never seem to understand the importance of stocking products across the (low to high) pricing scale. Last, greed: When the fired their well trained and knowledgeable sales staff, who worked on commission. They made a nice buck. Go into Radio Shack or Best Buy, yeah they may have one or two sales associates with limited knowledge of the product(s) but there are always sales associates on that floor that can tell everything you wanted and didn't want to know about a particular product.Who's gonna spend $300 to $3000 dollars on a mps 3, computer, TV and other electronics and sales guy/girl doesn't have clue what they're selling? Don't sale R.S. short, I go there all the time.
[Edited 1/17/09 16:54pm]

Circuit City was bad for business. I hardly heard anyone I knew going there. They usually chose Target over No-Circuit City so I say good riddance though it's supposed to be a tragedy for American consumers, lol.

I'll cry when they get rid of Target! Or that music store at our mall...

I went to the one by my house to pick up the Remastered edition of The Jacksons' Triumph



and it was closed!