CircuitCity.com Being Re-Launched Under Systemax

Earlier this year when Circuit City filed bankruptcy and began liquidating their stores it looked like the Circuit City name would be gone for good. Now however it appears that the Circuit City name will live on, perhaps not in the brick and mortar form we are accustom to but rather as an online only incarnation of it's former self.

Systemax Inc., which is probably best know as the owners of TigerDirect and as the company that purchased a bankrupt CompUSA, is Re-Launching the Circuit City brand. The company promises new lower prices, a wider selection, faster shipping and a customer first policy.

CircuitCity.com Announcement
by ComputerTV

According to a statement by Systemax Chief Executive, Gilbert Fiorentino:

Systemax Inc. is Re-Launching the Circuit City brand with new Lower Prices, new Wider Selection, new Faster Shipping, and a better 24/7 Customer First Service Department.

Circuit City served American Shoppers for 60 Years. We're here to continue that tradition online with lower prices and special deals, a better selection of the products you want most, award winning customer service and same day shipping, starting at $1.99.

Americans love to get great products at great prices. We promise you that is exactly what you'll find at the Re-Launched CircuitCity.com.

We have a team of folks feverishly working to put up the finishing touches on the new website. We ask that you come back in a few days and experience the New CircuitCity.com.

For more details checkout CircuitCity.com and follow their progress via Twitter @CircuitCity.com

Follow-Up: Circuit City Liquidation Sale

Following yesterday's post Circuit City Liquidation Sale, I was contacted by a Circuit City employee wishing to provides us with a little feedback on the ongoing liquidation sale as well as clarify a few details from that post.

According to the employee, that wishes to remain anonymous, the shelves at Circuit City store might look bare, however this was not due to items being sold out rather because they had not been receiving new stock for several weeks (possibly even months).

I don't know about other stores but at our store [location not disclosed] we haven't re-stocked shelves in a long time. Before the sale hit there were sections of the store that looked empty. In my dept. [cameras & accessories] we had plenty of stuff left because no one was coming in and buying anything before the sale but I saw other parts of the store with empty shelves.

When asked about rumors that the liquidators, Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC, had been raising prices on popular items anonymous responded:

I don't know about that, prices in my section looked the same. But prices tags on alot of items were gone. So you really wouldn't know what the original price was unless you looked it up. I guess they might have, but if they did we wouldn't be able to tell.

Yesterday during my visit I had noticed that several of the large ticket items I looked at didn't have prices. I also noticed that items displayed on a clearance table didn't have price tags. So customers were stuck trying to find someone that could access the computer system to verify the price of items before taking them to checkout. Removing the price tags means the liquidators could use the computer system and change prices at will and without customers knowledge.

As for customers buying items that were over priced it was noted:

People just pay whatever, I don't think they care. Its like they think they got a good deal so they are happy. I sold a guy a camera with a 10% discount and he thought it was the best deal ever. I mean I kind of felt like telling him he was an idiot cause we had that same camera around New Yrs. I think for way less.

As a final note I was asked to tell potential customers to keep in mind that the CSRs are working as hard as they can at a job they will only have for a short amount of time. They aren't responsible for there being a long line, a wait or there not being enough staff.

Circuit City Liquidation Sale

Yesterday it was announced that Circuit City would close their remaining 567 stores nation wide, this following November announcement that the failing electronics retailer would be closing 155 stores across the country. As part of the closure Circuit City will liquidate all of its remaining stores.

In many areas the liquidation sale off began this morning, many more stores are expected to begin selling off their remaining merchandise later this month. These sales will last as long as it takes to sell through the merchandise at each of the stores, something that Circuit City and its liquidators expect to wrap up by the end of March 2009.

Here in the Sacramento area Circuit City has 5 stores which will be liquidated. Those stores include 7980 Arcadia Boulevard, Citrus Heights, 205 Serpa Way, Folsom, 8211 Laguna Boulevard, Elk Grove, 10251 Fairway Dr, Roseville Folsom and 2121 Arden Way, Sacramento.

Citrus Heights being my local store I decided to run down there today and do some bargain hunting.

The store was pretty busy, with lots of people trying to hunt down a hot deal. The liquidation prices are nowhere near what they should be. TVs, computers and most high end equipment was marked at only 10% off, with some accessories, DVDs, CDs and furniture at 30% off. Despite the minimal percentages off the store looked picked over in some spots, yet hardly touched in others.

Being a computer geek I hit that section first. Laptops, PCs and LCDs are only 10% off, so there were no real bargains there. There was a limited number of employees, with only one or two in each section,and getting help was nearly impossible. So I didn't get to check the prices or inquire about sale prices on some of the components I was looking at. For the most part however everything was still overly priced.

From my observation there seemed to be more people leaving empty handed than there were people actually buying anything. I did see some rather poor decision making and some very bad purchases. I saw two laptops and a desktop that was extremely overpriced being bought. I didn't get model numbers, but I know one of the laptops had been on sale not long ago for far less than the gentleman was paying.

Overall I'd say it was about what I expected. A bunch of uneducated impulse buyers (for lack of a better term) thinking they are getting a great deal buying up overly priced items.

Tips for bargain hunters

From my perspective right now there aren't any hot deals to be had at Circuit City. That doesn't mean there aren't deals just that I didn't see anything that was priced in my target range. But here are some tips for those of you wanting to check it.

1. Research your prices ahead of time and go with a plan: If you are looking for a laptop then check prices at other local stores and get a feel for what the price range should be. If you've got an iPhone or other smartphone don't be afraid to use it to check prices elsewhere, heck call someone and ask them to look. But don't buy something just because you "think" it's a good price.
   
2. Know what you need and don't expect alot of answers: There were only a few CSRs on the floor and they were overwhelemed with questions. So don't expect them to help you find out if a part is going to be compatible with your system.
3. Plan for and expect a crowd: I saw several people in the parking lot getting frustrated with other drivers. I also so people complaining while standing in line to checkout. You should know ahead of time there is going to be a wait, it is a sale after all!
4. All sales are final: This is a liquidation sale which means once you leave the store with it it is yours. If there is a problem then you won't be able to take it back to the store. So make sure you know what you've got and that it will work before you but it.

*Update*
Shortly after posting this post I was contacted by an anonymous Circuit City employee that has provided us with a few details concerning liquidation prices, empty shelves and more. To read that post click here. It is also thanks to that employee that we added number 4 to the list.

Circuit City Files Bankruptcy

A week after announcing the closure of 155 stores Circuit City has filled for Chapter 11 bankruptcy and laid off an additional 700 people at its corporate headquarters for a total workforce reduction of 20 percent.

The press release released today announced that Circuit City has filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia ("Bankruptcy Court") in Richmond, Va. The company plans to continue operating the business without interruption as management focuses on developing and executing a comprehensive corporate restructuring plan. Circuit City's Canadian operations also will be seeking protection under the Companies' Creditors Arrangement Act in Canada ("CCAA").

Filling for bankruptcy protection is a move that will help keep suppliers like Sony, Microsoft, Toshiba, and many others who have yet to receive payment for their products, at bay while Circuit City tries to get back on track. The company has also secured a special debtors' line of credit to keep stores open and pay its employees during this time.

James A. Marcum, vice chairman and acting president and chief executive officer of Circuit City Stores, Inc., said, "We recently have taken intensive measures to overcome our deteriorating liquidity position. The decision to restructure the business through a Chapter 11 filing should provide us with the opportunity to strengthen our balance sheet, create a more efficient expense structure and ultimately position the company to compete more effectively. In the meantime, our stores remain fully operational, and our associates are focused on consistent and successful execution this holiday season and beyond.

"We appreciate the support we have received from our lenders in the midst of such a tight credit market. With this support, we believe we have the opportunity to leverage our market position and the strength of our brand to restore Circuit City to solid financial footing," continued Marcum.

"We understand how difficult the recent announcements have been on everyone at the company, and we recognize the changes personally affect many people. Further, we know there is never a good time for individuals to be impacted by decisions like these, and we deeply regret the effect this has on our associates. I want to thank them for their continued loyalty and dedicated effort as we go forward with the belief that implementing long-term and lasting change to our business will come by satisfying our customers, one at a time," concluded Marcum.

Rumor Update: Circuit City Closing 155 Stores

Last month we reported on the rumor that Circuit City might be closing 150 stores, it appears as though those rumors may indeed be true. The Consumerist, citing " anonymous insider tips", reported today that Circuit City indeed plans to close 155 of its 711 stores nationwide.

According to their sources, employees of the affected stores were told this morning about the closings, which will be officially announced tomorrow at 8am. The store closings will be effective 12/31/2008 and according to at least one of the reported tips, 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 as well as a scanned copy of a letter CC'd to The Consumerist by a tipster head over to The Consumerist.

To compound the issue, Gizmodo has reported that Sony merchandise headed for delivery to Circuit City stores has been halted in mid transport.

Circuit City took a major blow today, according to a reliable inside source, when Sony's merchandise that was being delivered to nationwide Circuit City distribution centers was stopped in transit and ordered to return to Sony "among worries that Circuit City couldn't pay for the shipments." This development means that Circuit City is not getting any Sony products replenished until they are able to convince Sony that their credit line is reliable. And with as bad as things are looking for Circuit City at the moment, that day may never come.

**Update**

It has now been confirmed by Circuit City that they are indeed closing several stores and liquidating those assets. In a press release released today the company sites many factors that have contributed to the company's liquidity position. These factors include the following:

-- Waning consumer confidence and a significantly weakened retail environment have impacted negatively the company's sales and gross profit margin rate to a greater degree than management had anticipated previously.

-- Following the company's second quarter results announcement, the company's liquidity position and the sharply worsened overall economic environment led some of Circuit City's vendors to take restrictive actions with respect to payment terms and the credit they make available to the company. Additionally, the recent disruption in the financial markets has contributed to certain of the company's vendors experiencing insurmountable challenges with obtaining credit insurance for the company's purchases. As a result of this and other considerations, certain of the company's vendors have set more restrictive payment terms than in previous quarters, including in some cases requiring payment before shipment. Vendors also have limited the credit available to the company for purchases, including in some cases not providing customary increases in credit lines for holiday purchases. While management is working diligently to secure the support of its vendors and believes it has maintained good relationships with these important partners, the current mix of terms and credit availability is becoming unmanageable for the company.

-- To date, the company has been unable to collect an income tax refund of approximately $80 million that the company believes it is owed from the federal government.

-- Due primarily to the weakened economic environment and its potential impact on the timing of sales of the company's inventory and costs and expenses associated with such sales, a recent third-party appraisal conducted for the company's asset-based credit facility resulted in a reduction of the estimated net orderly liquidation value of the company's inventory. This valuation adjustment was made despite the mix of merchandise remaining consistent with the previous appraisal in November 2007. This reduction has led to a lower borrowing base and reduced availability for the current period compared with what the company had expected previously.

James A. Marcum, vice chairman and acting president and chief executive officer of Circuit City Stores, Inc. said, "Since late September, unprecedented events have occurred in the financial and consumer markets causing macroeconomic trends to worsen sharply. The weakened environment has resulted in a slowdown of consumer spending, further impacting our business as well as the business of our vendors. The combination of these trends has strained severely our working capital and liquidity, and so we are making a number of difficult, but necessary, decisions to address the company's financial situation as quickly as possible."

Here is a list of stores that are closing: CC Closure List PDF

Rumor: Circuit City Possibly Closing 150 Stores, Massive Job Cuts

Rumors has it Circuit City is considering closing at least 150 locations and slashing thousands of jobs to avoid filing for Chapter 11 bankruptcy protection.

The Wall Street Journal is citing sources close to the company that say drastic measures may be taken to put the electronics retailer back on course. Circuit City is reportedly considering closing 150 stores and cutting thousands of employees. The move would allow Circuit City to liquidate $350M USD in assets and possibly avoid Chapter 11 bankruptcy.

Circuit City is currently the nations second largest electronics retailer behind Best Buy. However so far this year, shares have lost 90.7 percent of their value. With the looming financial crisis one can only guess that they'll be hit even more in the months to come.

Earlier this year Blockbuster made a takeover bid for just over a billion dollars. That bid was later withdrawn, with Blockbuster citing market changes.

One thing is for sure, with the recent closing of CompUSA should Circuit City close it doors Best Buy will be sitting even higher atop the food chain. They'd almost have a monopoly as one of the only remaining nationwide brick-and-mortar electronics stores. Personally I never shop either place. Stores like Fry's and Newegg file my needs at a cheaper price.

Blockbuster, Circuit City Merger Could Produce 'Exclusive' Content

In his public letter to the CEO of Circuit City requesting that negotiations commence on a merger deal, Blockbuster CEO Jim Keyes suggested that the combined retailers would not only be able to secure exclusivity deals for content -- as Blockbuster has already been known to do for its 7,800+ rental outlets in the US -- but might also have the ability to market and sell an undefined, exclusive content delivery device.

"The combination of Blockbuster and Circuit City will result in an $18 billion retail enterprise uniquely positioned for the convergence of media content and electronic devices," wrote Blockbuster's Keyes this morning. "We would seek to differentiate products in both Blockbuster and Circuit City stores by offering exclusive content and content-enabled devices. Both companies would benefit from complementary products, marketing, management strengths, technology and distribution and the resulting synergies would significantly improve consolidated financial performance."

Blockbuster announced earlier today a hostile takeover bid of between $6 and $8 per share or just over $1 billion for Circuit City Stores Inc.. Circuit City's response has only been to question Blockbuster’s ability to finance the deal.

Circuit City said it has exchanged information with Blockbuster, but advised its shareholders to take no action until the board examines the bid. Blockbuster hopes to enlist Circuit City shareholder support for its bid by disclosing previously private communications with Circuit City's executives.

At the end of trading today Circuit City shares climbed 27 percent closing at $4.97, while shares of Blockbuster plunged to an all-time low eventually closing down 10.2 percent, to close at $2.81.

Circuit City HD DVD Exchange Program

Several sites including PC Magazine and Gizmodo have confirmed that Circuit City is allowing customers who purchased an HD DVD player at Circuit City to return them to the retailer, which will give them store credit if received within 90 days of purchase.

Jackie Foreman, a representative for Circuit City, said in an email, "We did not make a public announcement about extended returns for HD DVD players, but we have instructed our stores to take care of our customers, therefore, we will accept returns for HD DVD players within 90 days of purchase. Customers returning these products will receive store credit for the purchase price."

The policy doesn't apply to HD DVD movie discs just HD DVD players, and it is reported your refund will come in the form of a gift card or store credit