Monday, November 10, 2008

Circuit City Buh-Bye

Circuit City has applied for chapter 11 bankruptcy protection. Can't say this is a surprise. Actually, it is mildly surprising since they were closing and cutting to stay avoid this through the Christmas in the sleaziest effort to fool customers I've seen in a while from a retail outlet.

Speaking of those closings, apparently the 155 stores they're liquidating have absolutely shitty deals. 10% off "retail" prices that have been raised, or 20% of some floor models. Final sale, as-is of course, so if it's fucked when you get home, tough shit. Looks great as they run ads that say "same price online and in-store" and the "retail" price listed is higher than the one online. Not CC's fault though, as theses stores are more than likely being handled by a liquidator, and those guys are angle-shooters.

Anyway, the real surprise is that it was chapter 11, which means they plan to reorganize and stay in business. Expect them to close even more stores, fire any veteran employees, cut management, and all those other things stores do when they're flopping on the beach gasping for air.

The thing is, that it's Christmas season, and that's THE time for retailers. With consumer spending already expected to be at a low, who the hell is going to shop at a bankrupt store that's NOT offering going-out-of-business sales? The stock is trading at $0.10. Expect Chapter 7 early in the new year and wave bye.

I'd feel bad for the employees, but CC canned all the good ones a year or so ago and replaced them with minimum-wage slaves. I imagine they keep the turnover high. Management deserves no pity, because they're obviously blind and brain-damaged lemmings.

They cite competition from Best Buy and Walmart as a big cause. Okay, so you can't compete with Walmart's prices... nobody can. But you know why Best Buy is kicking your ass? Because they're constantly evolving from an electronics retailer to a service provider. Best Buy set up Geek Squad how long ago? They push it heavily, and as such, the average Joe who doesn't know how to open his case (or perhaps doesn't know which part to open) uses them, or calls them up to come over, even if his computer, or TV, or whatever, is from Walmart. They charge a ridiculous rate, and his computer works again. I'd guess that 80%+ of the problems are easily fixed. Apple stores work similarly. Circuit City? Nothing close. Take a look at the cell phone section of your local Best Buy some time as well, they have dedicated employees for that section, and I imagine they'll expand that service area as well. Circuit City? Fires employees that know anything to hire cheaper, dumber labour.


Mondogarage said...

Doesn't a lot of this re Circuit City go back to the same operating philosophies they had when CarMax was part of the same corporate parent? I can't imagine customer service and skilled employees are valued by used car lots, even if they are really big used car lots.

It doesn't appear they're closing any of the stores around me, but looks like I'm not missing any deals just yet, anyway. But I'm sure I'll be able to score something early into the new year...

mookie99 said...

They are closing a store near us with similar crappy going out business sales.