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Circuit City to close 20% of its stores by year's end.

DailyTech reported in late October that Circuit City was on the brink of closing 150 stores and slashing more jobs. Circuit City's stock price has dropped over 90% since the start of the year and this past Thursday, the company was warned that it could be booted from the New York Stock Exchange.

It appears that that closing time is finally arriving for what's left of Circuit City's nationwide chain. The Consumerist reported today that Circuit City plans to close 155 of its 711 stores nationwide.

According to sources close to the company, employees of the affected stores were told this morning about the closings. The store closings will be effective 12/31/2008 and according to at least one report, Firedog and car installation employees will likely be fired within 48 hours.

As for what will happen to the closing stores, The Consumerist provided this commentary from an insider:

A team of liquidators will be coming in and taking control of the store. They will set prices as they see fit, and price match guarantee, employee discounts, CC circulars, and the new one price guarantee are all out the window. The price you see is the price you will pay, although it ought to be at a bit of a discount. Firedog services as well as car audio installation are gone immediately. Returns and warranties have to be taken to a CC that's not closing. No new stock will be delivered, we just gotta crank away and sell off everything, and when it's sold, we hit the road.

For more information about the layoffs including a letter sent to affected Circuit City store, you can head over to The Consumerist.


Updated 11/3/2008
Circuit City today officially announced its plans to close 155 stores which are located in 55 markets across the United States. The 155 stores being closed accounted for $1.4 billion USD in sales for fiscal 2008 according to a statement released by the company.

You can view the full corporate press release here along with a full list of all 155 closing stores here [PDF].



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Hrm...
By pfroo40 on 11/2/2008 9:03:28 PM , Rating: 5
This isn't good. I work for Geek Squad in Best Buy, and while logically I should be glad they're shutting down stores, I think it's bad news for the big box electronics market. It's less competition in an already limited market and symptomatic of the problems involved with brick and mortar stores in today's market. Not all Best Buy stores (and employees) are up to the standard I hold, and likely for the same reasons the quality of CompUSA and Circuit City employees fell off; e-tailers and Wal Mart. The simple fact is that brick and mortars can't compete with the kind of pricing available online. If they tried, they'd go out of business. Unless, that is, you have the sheer buying power of Wallyworld. So what do B&M's do? Cut corners, reduce headcounts, lower hiring standards and reduce pay, effectively shooting themselves in the foot by cutting out the only thing that set them apart from an etailer and walmart... Face-to-face interactions with reasonably intelligent and qualified employees.

Best Buy isn't quite that bad yet, although I'm sure everyone has had bad interactions at some point. (and good ones, I hope). But it could easily follow CC and CompUSA down the crapper...




RE: Hrm...
By Vertigo101 on 11/2/08, Rating: -1
RE: Hrm...
By FITCamaro on 11/2/2008 10:03:16 PM , Rating: 2
You've just described every sales person and car salesman in existence.

For bigger items B&M stores will always have my business. Yes I might be able to get something cheaper online, but I don't want to have to deal with shipping if something goes wrong. And for stuff like video games, its the same price and I don't have to wait for it.

Amazon will probably get a lot of my Blu-ray business but for DVDs I want, I get them the first week they're out when they're selling them cheap.


RE: Hrm...
By Samus on 11/2/2008 10:43:46 PM , Rating: 1
Best Buy is not a bad organization. They've done a lot to support their customers, such as eliminating mail in rebates, having exclusive (often less expensive) Best Buy CD releases from many major (and smaller) artists and improved their return policy.

They're also made Geek Squad more competitive (it used to be outragous) and increased the quality of agents they send out in the field. Additionally, the car audio division labor is now more reasonable, ironically around the time Circuit City started closing stores about two years ago.

Best Buy is also becoming a global enterprise with markets all over the world, especially in China.


RE: Hrm...
By Desslok on 11/3/08, Rating: 0
RE: Hrm...
By TreeDude62 on 11/3/2008 10:20:40 AM , Rating: 3
Killing of mail in rebates isn't all that bad. If a product has a mail in rebate everywhere else, they give it instant. It can mean better out the door pricing on many things.


RE: Hrm...
By MrBlastman on 11/3/2008 10:36:33 AM , Rating: 3
I hate going there as well - and I've posted many times about the shenanigans they have pulled.

I am sad that Circuit City is under pressure. I have made two different electronics purchases this summer that I had a choice between Worst Buy and Circuit Silly - and I went with Circuit City. The employees were friendly, helpful, did not try to cram stuff down my throat and - best of all - their prices were better than Best Buy.

I say we all go shop at Circuit City for a while. It will only help us in the future by having the extra competition.


RE: Hrm...
By Mitch101 on 11/3/2008 1:36:24 PM , Rating: 3
NewEgg Eff them both.

NewEgg is no hassle for returns. Would probably take back car tires even though they don't sell them.

BestBuy combs over a return like they are trying to put you away for murder. Dude it still has some packaging foam particles stuck to it stop making me wait for 2 people to approve an exchange no less. Not even asking for money back.

CircuitCity never had to deal with a return and knowing 3 locations on the list being closed I would have to say they were poor locations. Poor pricing is their demise they just dont seem to have what I want on sale or at a decent price.

As for retail brick and morter I worked for one large chain and saw what they pay for products. There is plenty of room for them to compete with online sales if they wanted to. With brick and morter you have it today and that's what they think is a premium to not compete. Plus there are a few people who fear online purchases especially on big ticket items. Safe to say they also don't trust UPS/FedEx for thier electronics delivery.

Now if Fry's would just come to Charlotte or take a few of those CC stores.


RE: Hrm...
By JasonMick (blog) on 11/3/2008 3:05:29 PM , Rating: 3
What I find most ironic about this news is that there's a BIG new Circuit City store that opened in my area literally just several weeks ago, and now its on the list of ones that are closing.

In fact both the ones in my area are closing.

But the new one especially baffles me. You open a store and then close it a few weeks later? That seems like some pretty amazingly stupid business logic as they must be taking a huge hit closing that thing.

Circuit City = Fail

Here's hoping something better comes along, or Fry's gets expands to more locations.... anything to give me a b&m alternative to Best Buy.


RE: Hrm...
By VoodooChicken on 11/3/2008 4:43:39 PM , Rating: 2
That's just like Ultimate Electonics a few years ago. They sprang up all over the place like a yeast infection, I went to one ONCE during grand opening, and none of their prices were very competitive. I thought the whole chain had imploded and went away, but apparently they exist in other states.


RE: Hrm...
By Cypherdude1 on 11/3/2008 10:01:11 PM , Rating: 2
I'm glad they didn't close the store in S. Calif. While I hardly ever shop at CC anymore, I still want to keep that option. They're closing more stores in Calif. than any other state. Georgia is second.

BTW, my S. Calif. city now has two (2) Best Buys. There are also two (2) Home Depots, a Wal-Mart, a Target, two (2) Office Depots, two (2) Staples, Ford and Chevy dealerships, and even a Mall. Why my city has so many stores I don't know why. My city isn't that large and the stores are only about 4 miles apart. Since the economy has deteriorated, I can't see how all these stores can remain open.


RE: Hrm...
By Mitch101 on 11/4/2008 10:57:52 AM , Rating: 2
I have 2 staples and they are no lie 1.1 miles apart.

http://tinyurl.com/6gy9x3

I must have asked about a dozen times are you sure its not an OfficeMax or OfficeDepot going into the shopping plaza? Nope its another Staples. The original Staples is not closing either. Neither is ever busy.

Imagine your a Staples and your competition is Staples. LOL.

I do love the idea if one store is out I can go 1.1 miles to get it at the other. ;)


RE: Hrm...
By Cypherdude1 on 11/3/2008 10:10:29 PM , Rating: 1
While I have made many purchases from NewEgg, I don't like buying impact-sensitive items online. Do you really want to buy OEM or even retail-boxed HDD's online? HDD's are very sensitive and can be damaged if they are dropped even 1 inch. I only purchase retail-boxed HDD's. I prefer to buy them at B&M's so I can examine the packaging for the slightest damage. While I am willing to take a chance on an OEM DVD drive from NewEgg, I would never purchase an OEM HDD anywhere.

quote:
NewEgg Eff them both.

NewEgg is no hassle for returns. Would probably take back car tires even though they don't sell them.


RE: Hrm...
By Ringold on 11/4/2008 12:42:25 AM , Rating: 3
You seem to be skipping on buying some of the best items I find to buy online. :P

I've had a CPU, motherboard, and RAM DOA, but oddly enough never a problem with hard drives or DVD drives, always OEM. I don't believe HD's are nearly that sensitive when they're powered down and the heads are in the locked position.


RE: Hrm...
By GaryJohnson on 11/4/2008 5:42:38 AM , Rating: 2
If they're dropped an inch when they're powered they can be damaged, but when they're unpowered the heads are parked and they're fairly resistant to damage.


RE: Hrm...
By theapparition on 11/4/2008 7:54:20 AM , Rating: 3
Correct.
Most hard drives withstand about 80g's of shock when parked. When in packaging, more like 500g's.

BTW.......how does the OP think those HDD's get to his local store???


RE: Hrm...
By pfroo40 on 11/4/2008 12:18:08 AM , Rating: 2
You can't blame the store for trying to protect their bottom-line, especially in today's economy. To put things in perspective for you, I can tell you for a fact that Best Buy loses money on every computer sold. Particularly on sale items. Some items are higher margin, a price for convenience, but most stuff is definitely not profitable. Even if you look at the cost of the item you also have to figure in the costs inherent with the product process, i.e. the cost to have the store open (lights, rent etc), paying employees, paying to ship the product... Etailers cut out the middleman and thus have a huge pricing advantage.

As far as combing over returns... Yes, of course they do. If you worked a day in retail customer service you would know why. A large portion of the populace cares nothing for the store and will return items in any condition for any reason and often make outrageous demands while doing so. If you knew how many times I've seen customers attempt to return stuff with cracked LCD screens... You'd look too. Oh, and that item you're returning? The $50 Best Buy lost on it just by selling it becomes $100 lost by you returning it. But they do return it.

Don't get me wrong, I love NewEgg and buy almost all of my computer components from them. But unfortunately your facts are scewed about B&M stores.


RE: Hrm...
By peritusONE on 11/3/2008 3:38:32 PM , Rating: 2
quote:
1. Killing off rebates (How was that good thing??)


Are you serious? Would you rather go to Circuit City and pay $799 for a laptop OTD, then mail away for a $100 check that you'll be lucky to get in 2 months, or go to Best Buy and get the same laptop for $699 OTD with no rebate hassles?

It's Best Buy's elimination of the MIR that has made me shop there again. Whereas I used to prefer CC to BB, I now prefer BB due to their customer-oriented tactics. When I was in the market for a laptop, I easily chose BB over CC when all of CC's prices were much, much higher--due directly to their "sales" involving a MIR.


RE: Hrm...
By Cypherdude1 on 11/3/2008 9:07:32 PM , Rating: 3
I have sent away for hundreds of dollars worth of rebates and I have never been ripped off. I have gotten every single rebate I have sent away for. I live in California and we have a strong "Department of Consumer Affairs." Perhaps in other states companies are more tempted to rip off people.

However, you are right about one thing: You must cut out the UPC on the box. When you do this, you can no longer return the item to the store should it become defective. Luckily, this problem never surfaced either.
quote:
Would you rather go to Circuit City and pay $799 for a laptop OTD, then mail away for a $100 check that you'll be lucky to get in 2 months, or go to Best Buy and get the same laptop for $699 OTD with no rebate hassles?


RE: Hrm...
By qdemn7 on 11/4/2008 3:50:58 AM , Rating: 3
Horrible for killing off rebates, oh puhlease....

Rebates are a scam plain and simple. They are designed to cheat people because the marketers calculate that a large percentage of people will not send them in, others will be rejected and will not pursue the issue. So they can suck people in to buy with an unrealistically low price that only a percenatge of people will actually receive.

I would like to see all rebates other than immediate ones, banned completely.


RE: Hrm...
By Staples on 11/4/2008 9:35:10 AM , Rating: 2
Getting rid of mail in rebates and turning them into instant rebates was far the best thing they have ever done. MIR are such a scam.


RE: Hrm...
By JonnyDough on 11/4/2008 1:59:19 AM , Rating: 2
The fact that they were using rebates to rip of customers, the fact that they do profiling of their customers (they call this "market research" in business), and the fact that their salespeople are TAUGHT to target their profiled customers according to which demographic is most likely to spend money in the store, rather than offering general polite sales service to anyone means that they are indeed NOT a good company. How would you like it if you have a question and are in a hurry and they ignore you to help someone more likely to be buying a big ticket item?


RE: Hrm...
By rupaniii on 11/4/2008 10:31:17 AM , Rating: 2
Nope, you do misinterpret the intent here. They are doing the customer breakdowns as a way to HUMANIZE their customers and teach sales. The fact is that feeling out a customer involves quickly identifying who and what they are. You might hear they have kids and they look mid 40's and their husband works as a UPS Driver. It's confidential info, but i'll say that guy is their bread and butter customer,and his wife tries to keep up because she is shopping for him. Etc. It helps to identify these people. I actually have done contract work for them and their sales training blows away their competitors and they concentrate on how to treat their customers. As usual, the individual application of the learning is based on the age and enthusiasm of the salesperson you get. I do have a great appreciation for what they are striving for. But, you can't just fire everyone if they don't get it 100% in 3 weeks and keep starting over. It's called Team Building. No, not every manager is good at it. It's taken me a while to get really good at building my own teams for what I do.


RE: Hrm...
By JonnyDough on 11/5/2008 7:42:55 PM , Rating: 2
Perhaps they've put a new spin on it recently. I read an article with direct quotes from the CEO of Best Buy I think it was, etc. He sure made it sound like demographic profiling. Targeting consumers in-store by giving the most personal attention to those most likely to spend money on big-ticket items is not something I made up. I read it directly out of the horse's mouth. That is what they were doing. It is rude and unfair to certain customers. A customer is a customer. Equal treatment for each customer is only right and just, and giving preferential treatment to those you BELIEVE to have more money is bullcrap.

Let's say you go to a restaurant. Your waitress thinks you won't leave a very big tip because the two guys before you looked like you, and left a $0.50 tip even though there were several people at both of their tables. Now, because of her "market research" she ignores you, even when you persistently beg her to come over she gives preferential treatment to a nice little old lady sitting by herself. Little old ladies have always tipped her well.

This is essentially what Best Buy has done. I read a whole article in a viable magazine about how "great" they are...the article was not negative. I really don't believe I misinterpreted anything. I got what they were saying...I just took moral issue with it.


RE: Hrm...
By MatthiasF on 11/3/2008 1:47:45 AM , Rating: 2
Technology based B&M stores have yet to adapt against online stores. There is much they can do to help draw customers in, but their store managers and company executives treat them like a normal retailer.

Circuit City, CompUSA, Computer city, etc. all scared away business by using cheesy retailer tactics like organizing the store to make people walk around to find what they want or even putting related items on opposite ends for the same effect, marking up accessories or offering little signage to explain the differences in products. Sales-force training is also a problem.

Until they realize they can't use the same tactics as a clothing store, they're always going to have troubles. They need to figure out a way to not only retain they're decent employees but also they're smarter customers or they'll always be a stigma hovering over them.


RE: Hrm...
By FITCamaro on 11/3/2008 5:53:30 AM , Rating: 4
Of course accessories are going to be marked up. They have to pay the power bill, rent, and employees salary somehow. You're paying for the convenience of being able to buy it right then and there instead of waiting 3 days to get it. As far as walking around the store, I don't mine cause I always do that anyway. Even if I know what I'm getting, I always walk around the store and play with stuff.

Trust me I have my own personal beef with Best Buy as I worked there in high school and college. But overall its a good store. Does it cater towards the high end or those who actually know what they're talking about? No. But that doesn't make them a bad store. It doesn't matter where it is, I never rely on the sales staff for anything. When I buy electronics, I've already looked at all the options before I ever set foot in the store.


RE: Hrm...
By rudy on 11/3/2008 2:40:59 PM , Rating: 2
I agree the online retailers have been moving toward solving their problems, the reasons they have lost business they keep addressing. I used to goto best buy when purchasing a large item because A I could return it though with a hassle and B I could get a replacement plan. Now online retailers offer both of those. Second thing was I did not trust the item or description online to be what was pictured. Now Online retailers are much better with multiple pictures and ofen keep newer versions on the same UPC as different product pages. During this whole evolution the B&M stores have done almost nothing. They just prey on people who are scared to not knowlegdable enough to shop online. And the comment about them being knowledgable is a joke. They do know a little more about stuff then walmart but the problem is they only use that little extra knowlegde sucker you into buying something more expensive your chances of getting crap are the same in both cases one is just more malicious then the accidental way you would get it at walmart.


RE: Hrm...
By cyriene on 11/3/2008 7:52:39 AM , Rating: 2
The sales people at Microcenter were smart and helpful. One of them told me they had to read computer tech websites so they could stay current with info about overclocking and what hardware is good. Too bad I moved and there is no Microcenter around me now


RE: Hrm...
By Joz on 11/3/08, Rating: 0
RE: Hrm...
By ebakke on 11/3/2008 1:41:55 PM , Rating: 2
Good lord man, find a place to release your stress/anger.

BTW, I agree that Minnesota's Microcenter blows.


RE: Hrm...
By Joz on 11/3/2008 2:34:33 PM , Rating: 2
can't I release it with a rocker launcher, Red Faction style?


RE: Hrm...
By ExarKun333 on 11/3/2008 6:12:29 PM , Rating: 2
I live in the Twin Cities and I agree that the Microcenter here sucks; but think about this. Would you rather have good products you can get right away (if your cpu fan breaks, and you don't have as spare, do you want to have to order one from Newegg or just run to the store)? Also, I would prefer to have good products at a decent price with sub-par service vs. crappy products/prices with a great staff. Let me shop and find what I need, pay for the stuff, and get the hell out...that's all I need.


RE: Hrm...
By kkwst2 on 11/3/2008 1:35:36 PM , Rating: 2
It's almost that way by definition. Most of the sales people are young school kids. Most real "geeks" are not going to be working at a retail electronics store. When I was in college, I had summer jobs at IBM coding and testing hardware. Hopefully, most smart/knowledgeable kids are doing something along those lines. Occasionally you may find a smart but unmotivated kid (ie Chuck), but those are rare and you're not going to keep many of them for long.

If you're going to Best Buy for tech advice, then you're not a very sophisticated buyer to begin with. It's just not reasonable to expect that kids making 7 bucks an hour are going to be experts on the products or be able to give you real tech advice.

Now for car salespeople, that's a different story because they make decent money. However, I think most of them are too lazy to even learn all the differences and features of the cars. Not sure if they're just run down and ragged by their jobs or if there is too much turnover or what. When I bought my car, the part-time college kid parking cars knew far more than the salesman, who couldn't show me how to use any of the tech features. So I had the kid show me the car and I dealt directly with the manager for the sale. On my first service visit, the kid was a salesman. Hopefully the original salesman was parking cars!


RE: Hrm...
By KeypoX on 11/2/2008 10:14:49 PM , Rating: 5
dude you do know best buy is known as worse buy for a reason...

honestly i like CC. And have refused to shop at BB for a few years now! You may be higher quality than most BB employees but thats not saying much.


RE: Hrm...
By bkslopper on 11/3/2008 3:31:08 AM , Rating: 2
I agree less options is a bad thing. We used to have a CC in Omaha, but they closed down years ago. Their location was terrible, next to Nebraska Furniture Mart. It's kinda like parking your rebel base next to a death star.

B&M has its perks. Refunds and exchanges are far quicker and easier. Plus its nice having a display model for hands on testing. I once brought an xbox 360 into a Best Buy and hooked it up to a Samsung HDTV. I tested the TV using VGA, component, and HDMI on various resolutions. Then I purchased it using instore credit from a returned TV that was 10 months past the purchase date. If it wasn't for the instore credit, I might've gotten it for a few bucks cheaper online.

Since that CC closed, Best Buy has opened 2 additional stores and seems to be thriving.


RE: Hrm...
By bkslopper on 11/3/2008 3:38:58 AM , Rating: 2
I forgot to add the TV I returned did not have an extended warranty. I called the manufacturer's help center and they offered to set up a credit refund through the Best Buy store I purchased it from.

I also have to say some employees know their stuff, and have witnessed some others spew outright lies. It all comes down to the salesperson.


RE: Hrm...
By FITCamaro on 11/3/2008 12:28:23 PM , Rating: 1
quote:
It's kinda like parking your rebel base next to a death star.


Worked out pretty well for the Rebel base in A New Hope.


RE: Hrm...
By bkslopper on 11/3/2008 2:50:43 PM , Rating: 3
Yeah, but Circuit City doesn't have a Han Solo working in the home audio department.


RE: Hrm...
By Smartless on 11/3/2008 1:31:43 PM , Rating: 2
Yeah i feel for you there. Hawaii can be as bad. For my electronic needs we have Circuit City, Walmart, K-mart, Sears, Bestbuy, Costco, Office Max and Office Depot. Tack on our higher cost of living and any shipping from an internet site wants to make you fly up there and get it yourself. That term "free shipping".... except for Hawaii and Alaska. DOH!


RE: Hrm...
By MrBlastman on 11/3/2008 10:34:20 AM , Rating: 2
So uh... how much data from customers HD's have you stored to your usb drive today?

;)


RE: Hrm...
By pfroo40 on 11/3/2008 11:52:36 AM , Rating: 2
Hah, even if I wanted to, everything is remotely monitored now. Plus I sorta like my job. :)


RE: Hrm...
By Screwballl on 11/3/2008 11:58:46 AM , Rating: 2
bah i would rather deal with CC over BB anyday.... at least Circuit City hires (usually) based on experience and qualifications... Best Buy hires whoever is willing to work the cheapest regardless of experience.


RE: Hrm...
By Mathos on 11/3/2008 1:33:21 PM , Rating: 2
That can pretty much be said about most any retail store. And then 90% of the time they don't place people based on what they know, they just go, we're gonna put you here, good luck. Kinda like I'm a computer/electronics person but you know where Wally world put me? Lawn and Garden, I know jack about plants, but at least I'll tell the customer that, and help them find what they're looking for anyway.

Now I've worked at Best Buy before, and I can say they've improved some, and also gone down hill quite a bit since I worked there back in 98. Their sales people get rode on bad about pushing accessories with everything, and the sad part is they don't even get commission for it.


RE: Hrm...
By Fanon on 11/3/2008 1:42:28 PM , Rating: 2
quote:
The simple fact is that brick and mortars can't compete with the kind of pricing available online. If they tried, they'd go out of business.


I disagree. I visit a Fry's every time I'm in a city that has one. I find the prices competitive with online retailers, and they beat the hell out of Best Buy and Circuit City.

If we had a Fry's locally, I would hardly buy any of my electronic goods online.


RE: Hrm...
By Pneumothorax on 11/3/2008 3:55:22 PM , Rating: 2
The problem with Fry's is while their prices may be close to internet, their level support is only as good, if not worse than internet retailers. I don't ever recall being asked if I needed help at a Fry's. This is perfectly fine for a nerd like me, but I wouldn't recommend sending Aunt Sally to a Fry's.


RE: Hrm...
By Staples on 11/4/2008 9:31:26 AM , Rating: 2
The problem is furthered by the fact that in most states, you do not pay any sales tax on online physical purchases. I have supported sales tax on online purchases because I think it will put them and B&Ms on a more level footing. Last thing I want is all local B&Ms that offer physical electronic equiptment to go out of business.


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