Contact Center Solutions Industry News

TMCNet: Circuit City begins its liquidation sale

[November 06, 2008]

Circuit City begins its liquidation sale

Nov 06, 2008 (The Kansas City Star - McClatchy-Tribune Information Services via COMTEX) --
The start of Circuit City's liquidation sale Wednesday was bittersweet for Don Miller of Belton.
Miller and others lined up before the 10 a.m. opening of the Overland Park store hoping to get a good deal on electronics. But Miller, who went throught the liquidation process with a former employer just three years ago, also was concerned about the stores' employees.

"It's not pleasant for people there to lose their jobs and then they have to stay until the end. So I'm sorry to see it," Miller said.

However, he did save about $13 on the Hewlett-Packard printer he wanted for his wife.
Circuit City -- the nation's second-largest seller of consumer electronics -- on Monday announced 155 store closings, including its five area stores. It also canceled plans to open a new Merriam location.

On Wednesday, Kansas City area stores discounted most merchandise by 10 percent with some items such as DVDs marked down 20 percent.

Still, some prospective customers left empty-handed saying that even with the discounts, prices were still better at other electronics stores or online.

Alan Palmeter of Overland Park was headed out of town and hoped to get a good deal on an MP3 player, but he decided to wait because the discounts weren't deep enough for his liking. Another couple headed north on Metcalf Avenue to the Micro Center, saying its full-price laptop was still a better price than the same discounted model at Circuit City.

Gary Jones of Leawood came armed with printouts on cameras recommended by ConsumerReports and comparable prices from Internet sites.

"If Circuit City doesn't have good prices, I'm not going to buy," he said.
While one camera at 10 percent off was cheaper than an Internet site, Jones figured it would be more expensive after he added taxes -- even with shipping costs included. He may return to the Overland Park store as discounts increase.

Under most store liquidations, discounts start at 10 percent or so and then increase closer to the planned store closing. Circuit City employees on Wednesday told customers that discounts would increase to 30 percent or more in December.

Some customers were concerned about warranties.
"It I buy a big TV, I want it to come from someone who is still in business. Some are $2,500," said Dewey Fry of Stilwell.

Jim Babb, spokesman for Circuit City, said the company would still stand behind its warranties and gift cards.

"The warranties are national, and if a store is not handy for a customer needing service, they just call the toll-free number on their receipt and our call center will help them with service issues," he said. "In addition, our Circuit City Advantage Protection plans are insured by third-party financial institutions, so consumers can be confident their plans will be in force based on the terms of the contracts."

Circuit City blamed waning consumer confidence and a weakened retail environment for the closings and layoffs.

But while U.S. consumer technology retail sales were down slightly in September, there weren't the significant declines some feared, according to market researcher The NPD Group. Indeed, flat-panel TV unit sales were up 20 percent from the same period in 2007 and notebook computers saw a 9 percent increase in sales with unit growth up more than 12 percent. Significantly, there were few new products to drive excitement and unit sales were growing while maintaining an average price of $800 to $900.

In July, Stores, a retail trade publication, listed Circuit City No. 32 on its list of top retailers with revenue of $11.7 billion in 2007. And while the magazine talked about increased competition, it also said the company was expanding its online presence and initiatives such as its new concept store called the City. In contrast, Best Buy was No. 12 with revenue of $40 billion in 2007.

Circuit City was still in expansion mode in recent months, opening one of its new City concepts in the Northland and planning another to open this fall in a new Merriam development. It also had taken over part of a former Ultimate Electronics location in Lenexa after that electronics retailer went through bankruptcy reorganization in 2005.

Many troubled retailers take the bankruptcy reorganization route, allowing them protection from creditors plus the ability to get out of bad locations and leases and to come back smaller but stronger.

But as the financial crisis has worsened, liquidations are starting to replace reorganizations. Fewer companies are in expansion mode and the ones that are can be selective in choosing sites. Credit to keep paying vendors, bankers and employees during reorganizations also is tighter.

Liquidation sales allow retailers to recoup much of their wholesale costs. Still, the retailers or their liquidators try to get as much return as possible, starting with small discounts and gradually increasing the percentages as the time for them to vacate the property gets closer.

Still, some customers won't wait that long and will buy now, so selection also diminishes as time passes.

Armed with his Internet comparison prices, Jones didn't seem to be worried.
"That's how I shop, the best prices," he said.
------
About the liquidation
Circuit City's liquidation sale began Wednesday and will last as long as it takes to sell the merchandise. A few details:

--No personal checks.
--Customers may not buy merchandise online for pickup at the liquidation stores.
--No delivery service.
--All sales are final. But customers have either 14 or 30 days (depending on the product) to return items purchased before the closing sale.

--Home theater installations are available but not new PC services or car installations.
--Warranties are unchanged.
To reach Joyce Smith, call 816-234-4692 or send e-mail to jsmith@kcstar.com.
To see more of The Kansas City Star, or to subscribe to the newspaper, go to
http://www.kansascity.com. Copyright (c) 2008, The Kansas City Star, Mo.
Distributed by McClatchy-Tribune Information Services. For reprints, email
tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax
to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave.,
Suite 303, Glenview, IL 60025, USA.

[ Back To Contact Center Solutions Homepage's Homepage ]


Related Contact Center Solutions Articles
[ View all Contact Center Solutions Articles ]

Socialize with us

FREE Contact Center Solutions eNewsletter

Click here to receive your targeted Contact Center Solutions Community eNewsletter.[Subscribe Now]

Industry News

Featured Resources

Contact Center Solutions Glossary of Terms

Press Releases

About the Contact Center Solutions Community

    Welcome to the Contact Center Solutions Community The Contact Center Solutions Global Online Community, Sponsored by Interactive Intelligence, is designed to serve as the industry's premier resource for information and research on Contact Center Solutions technology and deployment strategies.