American consumers Circuit City Stores Close.

[Gregoo]

How sad it is that a large company such as Circuit City stores in the USA is no more.See below.

Circuit City Stores Inc., the nation's second-biggest consumer electronics retailer, said Friday it had run out of options and will be forced to liquidate its 567 U.S. stores. The closures could send another 30,000 people into the ranks of the unemployed. The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable. And bleak holiday sales results further weakened even the stronger retailers.

I do fear for many of our Home Cinema and Hifi Retailers.What will the end of this year bring.I feel I have done my little bit and bought a new Sony Blue-Ray player and some Chord speaker cable.Lets just see who are left come the end of 2009.
All the best Greg.

 

[Ian J]

I'm afraid that we have enough to worry about with UK companies going bust without having to worry about American companies too

 

[RMCF]

Could they not have held on for another week or two, when the saviour Obama would have come to their aid.

 

[dts_boy]

from what i have been told by a friend that works high up in one of the largest UK independant stores is that its not looking good. quite a few companies like empire direct work on a low profit maring relying instead that meeting volume targets will bring them retro bonuses (or something like that - can you tell i'm not a business expert?!)
as fewer people have bought over the past year its pushing them over the edge and causing them to disappear. my friend tells me that iver 80% of their business is custim install even though primarliy they are a high street reatiler. developers going under has dragged some companies with them - owing large amounts for goods provided.
its not the best way to look at it but i for one am hoping that those who put cusotmer service and support above box shifting to prosper in these difficult times as i don't mind paying a little extra for service. my installer took my call on boxing day when i reported my programmed remote had stopped working and managed to diagnose and help me fix it over the phone!

 

[Gregoo]

Hi Ian.Yes I am worried about the UK .Empiredirect has gone and its prices were
quite keen.But you only have to look at some of the other well known companies in the UK to see that their prices are still lower than Empiredirect were.Its going to be a sad year.But like I said I have spent my cash this year at Frank Harvey Hi-Fi and also at Superfi."whats in your wallet"
All the best Greg.

 

[unique]

Could they not have held on for another week or two, when the saviour Obama would have come to their aid.

they actually filed for chapter 11 bankruptcy protection a few months ago, and couldn't find a buyer or alternative to liquidation, which is what's happening now. things are a bit different over there. you don't normally get a company suddenly going into administration and closure, like woolies, zavvi, empire direct etc. chapter 11 is a law to help the company sort themselves out without creditors shutting them down by suing them

 

[Gregoo]

Cheers,Thats interesting.A good idea.
All the best Greg.

 

[Phil Hinton]

Sadly we live in an age where people want stuff dirt cheap and the state of the market is now unsustainable. It costs a certain amount to make a product and then you have to add in the margins for the various parties. However I have it on good authority that one high street major are buying in certain brands TVs for more than they are selling them. No matter how you look at it, that just doesn't make any business sense, so it will go tits up soon.

It's sad to see business fold and people lose their jobs, but at the same time this current mess may very well rebalance the market and goods and margins actual mean business can be sustained and customers still get a good deal, just not as silly cheap as it is now. If retailers suffer, the manufacturers suffer and that R&D budget disappears and we end up with crap being sold as cheap crap - many will say that has already happened.

I personally would like to see some quality and margins back into the market so technology moves on at a sustainable level, and we keep the good retailers. It means slightly higher prices than now, but I would rather have that stability and quality. Rather than price cutting that just gets everyone in trouble, crap product made to a cheap price, no margins so business goes bust and manufacturers no longer spend to develop.

 

[johnny-17]

The problem is that most people want cheaper without understanding the implications. I would rather a company makes a profit, big or small, as long as they remain in business for me to buy things from them, thats the main thing. I prefer choice, not poor quality.
The sooner people realize that there will always be people 'above' them and there will always be people 'below' them in the scheme of things, the better it will be for them as they can get on with their lives without getting hung-up on other people making a profit.
Consumers are now dictating the price, quality and level of service we get today without even knowing it. Power to the people

 

[krish]

they actually filed for chapter 11 bankruptcy protection a few months ago, and couldn't find a buyer or alternative to liquidation, which is what's happening now. things are a bit different over there. you don't normally get a company suddenly going into administration and closure, like woolies, zavvi, empire direct etc. chapter 11 is a law to help the company sort themselves out without creditors shutting them down by suing them

I thought 'administration' was kind of similar to Chapter 11 in that the business is temporarily protected from its creditors whilst management attempts to restructure its finances.

Athough temporary, can be very nasty, since the creditors are screwed and many go under as a result. I recall Ipswich Town FC going into temporary admin a few years ago, leaving several local businesses in deep crap.

 

[Steven]

From the vault of my browser history
Why Circuit City Busted, While Best Buy Boomed - TIME

 

[unique]

I thought 'administration' was kind of similar to Chapter 11 in that the business is temporarily protected from its creditors whilst management attempts to restructure its finances.

Athough temporary, can be very nasty, since the creditors are screwed and many go under as a result. I recall Ipswich Town FC going into temporary admin a few years ago, leaving several local businesses in deep crap.

i'm not an expert in insolvency, but i've been involved in a few in the uk, and known a few more people quite well that have been involved in it. i don't know much about the american version, but based on experiences in the UK and what i've read about the USA it appears that in practice the american version offers more in the way of protection to get a company back trading solvently, whilst in the UK administrators generally end up winding up most companies fairly quickly after a short attempt at trying to sell them on as a growing concern

the wiki links give more info, but don't say too much about the UK version. my view is that in the UK it seems more a case of when the administrators are called it, legally the creditors can't do much about it, whereas in the USA it's intended more to protect the company to get back on it's feet again. my view could be biased from experience, as i know that once the administrators are called in, the creditors are usually screwed and know there isn't much chance of a company paying back all debts in full and/or continuing to trade. i suppose most of the chapter 11 cases i read about are for large american companies, whereas the UK cases i know about are mostly small to medium size companies


Chapter 11, Title 11, United States Code - Wikipedia, the free encyclopedia

http://en.wikipedia.org/wiki/Administration_(insolvency)

 

[Chris Muriel]

Yes, Chapter 11 gives a lot more chance (or manoeuvring room) for a troubled company to put together a recovery plan - whilst trading along the way.
I visit the USA several times per year (on business) and have watched many companies file for Chapter 11 bankruptcy protection and then come out of it many months later. Also quite a USA airlines filed for chapter 11.
A well known retailing name that was in that position was Kmart.
Basically in the UK system the appointed admnistrators tend to spend a much shorter time trying to sell or refinance a company as a going concern - resorting to blatant asset stripping at a very early stage.

End of minor rant.

Chris Muriel, Manchester

 

[Peridot]

From the vault of my browser history
Why Circuit City Busted, While Best Buy Boomed - TIME

Interesting article. Certainly when I visited a couple of their stores a few years back they reminded me of the UK Tandy shops in the '80s.

I suppose it's not surprising that the weak and the lame will be the first victims of the current situation.