Sunday, January 18, 2009
Circuit City Goes Dark
It was announced that Circuit City was unable to secure more financing or to find a buyer for its troubled business. They have started an immediate liquidation sale at all their stores.
This has been a long time coming. Without getting into too much detail, I had a lot of dealings with Circuit City at a business level. I was, to say the least, not impressed with them. When you compared them to companies like Best Buy, it was hard to see how Circuit City was ever going to make a comeback. I predicted that a major retailer would go under this year. While this one does not count toward that prediction, lots of people expected this, it really does not forebode well for the economy going forward. Circuit City hires about 30,000 people. That's 30,000 jobs that just vanished. To make things worse, this probably will serve as a domino effect. That is, Circuit City is often found in either malls or shopping centers. These types of stores are considered "anchor stores". They drive traffic to the other stores as people tend to like to do their shopping all at once.
I actually went to a Circuit City this past weekend to see if there was anything worth buying. Let me go on record as saying almost all Liquidation sales are a complete waste, and this one is no exception. I could go on a long post about how liquidators dupe consumers in these sales but I digress. Let me just say this. The particular Circuit City I went to was packed. I had never seen it quite so full. Walking in to the store, there were long lines as people were waiting their turn at the undermanned cashiers. As I walked around the store, I saw several signs for either 10-30% off the original price. Is this a good deal? Not sure how people think that it is.
You can buy almost anything online for 10-30% off. Seriously, just go to Amazon and do a little bit of shopping. Almost everything there is at least 10% off the MSRP. All most liquidation sales do is to mark things back up to the original price, and then take the discount off the top. While 10-30% is nothing to sneeze at, it also is not as good of a deal as it seems. I checked out several TV's and sound systems just to gauge how much one might "save" and pretty much everything I looked at could be had for cheaper at Amazon and for us Californians had without sales tax. Yet here was a store full of people waiting in Christmas-like lines to get these "discounts". If this is not some sort of commentary on the American Consumer, I am not sure what is.