Circuit City... bankrupt?

Orion_of_Chaos

Orion_of_Chaos

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So... a bit of info just got dropped on me. I can't disclose the source, other than it's from within a law firm. Supposedly Circuit City just filed for bankruptcy. It hasn't hit any news source that I've seen or heard of, so it may be false, but my source says she trusts the info completely.

The main thing to take from this is GET RID OF YOUR GTA4 $10 GIFT CARDS ASAP.

My apologies if this turns out to be false, but I suppose we'll see soon enough.
 
[quote name='Lieutenant Dan']Hmm. What happens to the CC warranty I bought for my TV two days ago?[/QUOTE]

You go to the store and return it and the TV and go buy it from Best Buy along with the warranty.
 
[quote name='oNeWiNgEdAnGeL']You go to the store and return it and the TV and go buy it from Best Buy along with the warranty.[/quote]

Yeah, like...RIGHT NOW.
 
depends what the bankruptcy is, chapter 11 is like rehab, they try to get their act together and for consumers it is business as usual
chapter 7 is on the brink, and they could get bought out or are liquidated.
In either case, for consumers, this isn't a doomsday scenario where you have to spend any credit or gift cards immediately
 
circuit city was not the only company to file for bankruptcy today either.. among the list are sharper image, linens and things, hollywood video & two others i cannot remember.. this news was given to me thru my law firm as well.
 
[quote name='Day1221']circuit city was not the only company to file for bankruptcy today either.. among the list are sharper image, linens and things, hollywood video & two others i cannot remember.. this news was given to me thru my law firm as well.[/QUOTE]

Whoa, Gamecrazy going bankrupt? Scorch needs to confirm.
 
regardless if its chapter 11 or chapter 7 (or any chapter for that matter)

if you have gift cards, redeem them NOW. when a company files for bankruptcy, all "unsecured debtors" pretty much go y the wayside... (that means gift cards, and pretty much any other debt CC owes other companies for good and services) and they negotiate a "buyout of that debt"

(this happened to my company, we did about 800 bucks worth of work for a customer, and they filed for bankruptcy 3 days after we finished our work, I sent an invoice and was advised that they couldn't legally pay the bill because it was forwarded to their lawyer, the resolution ( after 3 months of BS paper work) was to pay all unsecured debtors 8% of what they were owed (so I was going to be getting back about 10 dollars form them....)

total BS...

long story short.... redeem anything you have RIGHT NOW!
 
Hah. Even if they weren't going bankrupt, the sudden large amount of people getting ready to redeem their GC's sure as hell isn't going to help them.
 
Wall Street Journal has been hinting at these companies filing for protection for weeks now....is there a special day when they file or were they all just like "I WANNA GO BANK. NOW!!!"
 
[quote name='thingsfallnapart']Well we all knew Hollywood videos time was coming up.[/QUOTE]

Hell, I thought they had already filled for bankruptcy.
 
[quote name='strongpimphand']Wall Street Journal has been hinting at these companies filing for protection for weeks now....is there a special day when they file or were they all just like "I WANNA GO BANK. NOW!!!"[/QUOTE]

They wait for the end of the Fiscal Quarter.
 
While it's true that things like gift card will hold no value when the company goes under, filing for bankruptcy doesn't mean the stores will close the doors tomorrow. It's a good heads up to think about what you're going to do with it, but don't go there tonight and buy a Kenny G CD just to spend it.
 
I have heard about the demise of Circuit City for a LONG time, almost as long as we all heard about the demise of CompUSA...I think eventually Circuit City will have to go...but not for a couple of years.
 
[quote name='Day1221']circuit city was not the only company to file for bankruptcy today either.. among the list are sharper image, linens and things, hollywood video & two others i cannot remember.. this news was given to me thru my law firm as well.[/quote]

Your news source is full of shit.

Sharper Image filed for bankruptcy MONTHS ago. Feb 20 to be exact.

Linens and Things was able to get their scheduled bond payment postponed for another YEAR. The new interest payment still puts them on a death watch however.

Circuit City has had absolutely no indication that they are going bankrupt yet. Their stock is actually UP from where it was 4 months ago.
 
[quote name='Lieutenant Dan']Hmm. What happens to the CC warranty I bought for my TV two days ago?[/QUOTE]

Most likely the warranty is actually held by an insurance company that underwrites it, so if CC does go belly-up it shouldn't have any effect on your warranty. For example, BB warranties are underwritten by AIG. GE is also a large underwriter for these things. Not sure who does CC warranties, it probably is mentioned in your paperwork, but I see no reason to rush back to the store to do a return if you got a good deal.
 
[quote name='thingsfallnapart']if circuit city goes, there goes any chance we'll ever get good deals on video games on launch.[/QUOTE]There's always Radio Shack
;)
 
[quote name='JolietJake']How would this effect blockbuster buying them out?[/quote]

Um, you honestly think that Blockbuster will be able to buy them out?

Do you know that Blockbuster is in debt itself? Where do you think they are going to pull this buy out money from? As of last count, they had 186 million in cash eqivalents on hand, with 667 million in long term debt. They won't be buying anyone any time soon.
 
[quote name='mtxbass1']

Circuit City has had absolutely no indication that they are going bankrupt yet. Their stock is actually UP from where it was 4 months ago.[/quote]

stock prices mean nothings....the dotcom companies had high stock values, the books showed no profit, and there forecast weren't showing any signs of profit anytime in the forseeaable future. The stock value of any company is what is deemed as fair market value between the buyer and the seller regardless of the companies financial situation. The recent uptick in stock value is either confidence in the new stockholders in cc as a corporation, or people hoping to make some money on a cheap ass stock.

As for using the gift cards, if it is true that they are filing for some sort of bankruptcy, they do not need to honor the gift cards. It is unsecured debt, and they are under no obligation to value it at the register. Just because they may remain open, does not mean they will take gift cards. There were a ton of news articles about gift cards after the new year this year and how they wouldn't be honored if stores filed
 
[quote name='ryanbph']stock prices mean nothings....the dotcom companies had high stock values, the books showed no profit, and there forecast weren't showing any signs of profit anytime in the forseeaable future.
[/quote]

Your example is weak. The entire tech sector bubble burst. We are talking about a single company here. One company didn't go bankrupt when that bubble popped. Dozens did. CC was profitable in their fourth quarter.

CC's stock has hovered around $4 for quite some time now. This guys "source" is about as valid as my cousins uncle's best friends sister saying the same thing.

Until I see it picked up by one of the seven financial sites I follow, I'll continue to call it worthless.

Edit: I see you added more.

[quote name='ryanbph']
The stock value of any company is what is deemed as fair market value between the buyer and the seller regardless of the companies financial situation. The recent uptick in stock value is either confidence in the new stockholders in cc as a corporation, or people hoping to make some money on a cheap ass stock.
[/quote]

Fair market value? The only reason you saw an uptick in the stock here is due to speculation. That is it. People hopping on board, hoping that someone WOULD buy CC, and they could either get bought out, absorbed, or make a slight increase.
 
I never claimed CC filed for bankruptcy. I was claiming your belief that the stock price has anything to do with a company and there financial situation was BS. We aren't talking about a single company are we, we are talking about a decent amount of retail and restaurant chains that are financially unstable.

Yeah and a $4 stock is signs of a giant retail chain that is doing just fine. They are up what .70 or so cents from there 52 wk low. Come on, they were over $17 this past year. In the past 6 months they were up over $8 a share.
 
[quote name='ryanbph']I never claimed CC filed for bankruptcy. I was claiming your belief that the stock price has anything to do with a company and there financial situation was BS. We aren't talking about a single company are we, we are talking about a decent amount of retail and restaurant chains that are financially unstable.
[/quote]

Nor did I claim you did. I stated that the OP's "source" is BS. Every company he mentioned and "two others" either already announced bankruptcy or annouced restructuring plans.

[quote name='ryanbph']
Yeah and a $4 stock is signs of a giant retail chain that is doing just fine. They are up what .70 or so cents from there 52 wk low. Come on, they were over $17 this past year. In the past 6 months they were up over $8 a share.[/quote]

If you want to play a numbers game, we easily can. Bear Sterns went from a 52 week high of $158.22, all the way down to $2.84. They are currently at $10.73. Do you think they are doing fine? Hardly. Did they file bankruptcy? NOPE.

The point here is plain and simple. Circuit City is on it's death bed, and has been for many months, but until a more reputable source comes along than "my lawyer friend", this is nothing more than a RUMOR, and given the fact that two other companies that were mentioned have either already filed, or restructured, I would say that the OP's "source" is full of it.
 
[quote name='Lieutenant Dan']Hmm. What happens to the CC warranty I bought for my TV two days ago?[/quote]

I've heard rumors of warranties at CC going the way of the dodo if they go belly up. I was talking to one of the tv sales people at CC, and they said that the warranties would be essentially null and void as they are even having problems covering them now.

[quote name='thingsfallnapart']if circuit city goes, there goes any chance we'll ever get good deals on video games on launch.[/quote]

Fry's baby! Also, I'm sure some company will come in and fill the void. Hopefully Microcenter will start a deep expansion. Also, Target occasionally has the new game on sale.

[quote name='bmsdaddy']Most likely the warranty is actually held by an insurance company that underwrites it, so if CC does go belly-up it shouldn't have any effect on your warranty. For example, BB warranties are underwritten by AIG. GE is also a large underwriter for these things. Not sure who does CC warranties, it probably is mentioned in your paperwork, but I see no reason to rush back to the store to do a return if you got a good deal.[/quote]

Read what I said above.

Glad I got my GTA card from BB!
 
[quote name='mtxbass1']Nor did I claim you did. I stated that the OP's "source" is BS. Every company he mentioned and "two others" either already announced bankruptcy or annouced restructuring plans.

.[/quote]


We seem to agree on most of what has been given, but the way we type/read each others posts seems to make for some confusion...

In your first post you wrote how CC has not given any indication of filing, and there stock price was up in the past 4 months.. Reading that post, I understood that you believed that the uptick in stock price was proof that they weren't filing for bankruptcy. Maybe I looked to much into a 1 or 2 line statement. My mistake..

You also took a shot saying that the dotcom bust was a poor example as the majority of the industry went. My response to that was lost in my last post. I said that a fair amount of chain restaurants/stores are in financial trouble. IMO, it is possible you will see a shit load of retails chains coming across hard times. Lower value of the dollar, soon to be increased costs to bring these products to the USA, the alleged harder approval process for loans/credit cards to be given out should take a big chunk out of retail stores revenue. Throw in the fact of the growing use of online shopping and the fact several stores have already filed, or are restructuring are not good signs for the retail chains. Will it be as bad at the dotcom, hell no but it could take a toll on a bunch of stores.
 
[quote name='thingsfallnapart']They wait for the end of the Fiscal Quarter.[/QUOTE]
i'm stupid for even posting that.....i should have edited that last part because i'm suppose to know stuff like that off top
 
[quote name='mtxbass1']Um, you honestly think that Blockbuster will be able to buy them out?

Do you know that Blockbuster is in debt itself? Where do you think they are going to pull this buy out money from? As of last count, they had 186 million in cash eqivalents on hand, with 667 million in long term debt. They won't be buying anyone any time soon.[/quote]That was the rumor posted a while ago, i don't know personally.
 
[quote name='ryanbph']We seem to agree on most of what has been given, but the way we type/read each others posts seems to make for some confusion...

In your first post you wrote how CC has not given any indication of filing, and there stock price was up in the past 4 months.. Reading that post, I understood that you believed that the uptick in stock price was proof that they weren't filing for bankruptcy. Maybe I looked to much into a 1 or 2 line statement. My mistake..

You also took a shot saying that the dotcom bust was a poor example as the majority of the industry went. My response to that was lost in my last post. I said that a fair amount of chain restaurants/stores are in financial trouble. IMO, it is possible you will see a shit load of retails chains coming across hard times. Lower value of the dollar, soon to be increased costs to bring these products to the USA, the alleged harder approval process for loans/credit cards to be given out should take a big chunk out of retail stores revenue. Throw in the fact of the growing use of online shopping and the fact several stores have already filed, or are restructuring are not good signs for the retail chains. Will it be as bad at the dotcom, hell no but it could take a toll on a bunch of stores.[/quote]

Yeah, I'm definitely not implying that an uptick in their stock is indicating that they won't go bankrupt. I fully expect them to sometime soon. I'm calling out the OP's source.

In regards to a fair amount of chain restaurants/stores going under, I believe that is a bit of a stretch. These companies that are going under right now are a result of thinning the herd. For every Circuit City, there is a Best Buy. For every Linen and Things, there is a Bed, Bath, and Beyond. For every (insert pizza place here), there is a Dominoes and Pizza Hut, both of which are doing quite well.

The lower value of the dollar will have far more damaging effects than causing a few retail chains to go under. Online retailers will continue to gain steam, however, they eventually will have to pass costs on to consumers, if they haven't already. Keep in mind that there are still a vast majority of people who don't shop on the Internet at all. Most B&M's have an Internet prescense nowadays, so if anything, that point is moot. Newegg isn't going to put CC, or BBY out of business. If they were going to, they would have done so by now.

No harm, no foul meant towards you btw.
 
[quote name='JolietJake']That was the rumor posted a while ago, i don't know personally.[/quote]

It was no rumor that Blockbuster wanted to buy Circuit City. They filed papers indicating this. The rumor is that they could actually have the means to pull this off. Blockbuster itself is in debt. They lose market share every single quarter. They were hoping to finance the CC deal by taking on more debt. That might work when the economy is rosy, but right now, things aren't so hot. There is absolutely no way BBV can come up with the capital to make this go through.
 
[quote name='PRMega']So this is why they're changing their name. And moving to Mexico.[/quote]

"El Bzz Bzz Bazaar"?

I like it.
 
If there is any truth to this rumor, I know they aren't related much anymore but I'm going to come right out and say it anyway:

Speedy1961: 1
Circuit City: 0

~HotShotX
 
This will go on to be another bs restructuring if they were to file bankruptcy.

Like how the infamous Kmart bought SEARS?:roll:, Lord have mercy any judge(s) to let Kmart buy any other company is mentally incompetent. Sears is also now in trouble (Sorry for those who love the store) because it cant respond to the dynamic market. Kmart has not changed anything they needed to (CUSTOMER SERVICE) and rather placed Craftsman tools in the store for a savior of a strategy.

CC also suffers the same primary problem, customer service. Despite a day an age where the consumer doesn't need his/her hand held when making a purchase, if you are a big box, you have to get what little customer service you have right. Walmart for example, is the busiest and has the least tech savvy employees, however they succeed because for the most part they are friendly, willing to help, and you can check out in a matter of minutes at 40 registers.
CC on the other hand, will have one register open, employees who generally dislike their job, manager, etc. and will go out of their way to pass on a question to another employee, or avoid the customer all together. As always there are exceptions to this stereotype, but these are mine and many other's experiences at CC.

Back to my point, due to the breadth of CC and its always excess capital (inventory), some restructuring of debt, equity, or extreme case acquistion will allow CC to keeping ticking for another good decade.
 
CC is the only electronics retailer where I can redeem 10K citi thank you points for a $100 gift card; best buy and amazon only let me get a $50 gift card for 6K points. this would be a major bummer for me :( Plus I like how I'm not pounced on once I go into the store by employees trying to sell me crap (best buy)
 
It'd be about the only way to get me back into a CC. :lol:

[quote name='crystalklear64']Hah. Even if they weren't going bankrupt, the sudden large amount of people getting ready to redeem their GC's sure as hell isn't going to help them.[/quote]
 
management at CC got an email a few days ago about the bankruptcy.. i may be able to find out more when an employee i know goes to work today.. and as a former employee of 3 years, i say it was just a matter of time.

i remember an assistant manager at the store i worked at didn't even graduate high school. our store manager didn't have any college courses under his belt either, making 70-80k a year. getting a position at CC was all about being somebodies buddy. we were understaffed for the longest time, corporate decided to spend money on a new computer system(600 million), to go from the decade old DPS(flawed but functional), to Magellan(never even seen on the west coast), and now i heard its a totally different one that probably wont work right to add to the nightmare of working at CC. unless their plan was to rack up as much debt they can and then file bk to avoid paying it, then I'd say they don't have a clue as to what their doing. but really it was the downsizing of mostly experienced hourly associates that was CC's downfall. they should have trimmed more fat from the corporate level, since they were the ones making the decisions that were driving the company off of a cliff. CEO making 2 million dollars while the company is in debt?

I don't understand it... if the highest paid officers took a pay cut, maybe canceled their month long vacation to Europe, they could have easily paid their experienced associates their ~30k a year. another funny thing was hiring a bunch of idiots to sell stuff they had no clue about, and then going from departments to "full floor" in which you had somebody that rung up DVDs/video games, trying to sell TVs/car stereos/or computers... oh i remember people leaving angry due to the lack of knowledge shown by associates it was hilarious. every month the region i worked in didnt hit their sales budget. well now most of the former employees work at best buy and are making 1-3 dollars more than before with a 50% off discount...CC gave about a 10% discount, and they still tried to sell you a full price warranty.

anyways, good riddance, i just hope prices aren't affected with less competition around.

REDEEM YOUR GIFT CARDS!! RETURN YOUR WARRANTIED PURCHASES!
 
[quote name='Monsta Mack']Whoa, Gamecrazy going bankrupt? Scorch needs to confirm.[/quote]

This is like the second time Hollywood Video has filed for bankruptcy. They've already drafted and put forth a restructuring plan to come out of debt. GameCrazy's fine, they're shutting down unprofitable HWV/GC/MG stores. GC isn't in danger as a company, and GS can't buy them out without also buying out MG and HWV. You know that if the company was in danger of going belly up, I'd let you guys know.

Speaking of dirty things CC does, anyone remember this gem about charging for backwards compatibility?

http://www.joystiq.com/2006/09/01/circuit-city-will-make-your-360-backwards-compatible-for-30/
 
[quote name='Scorch']This is like the second time Hollywood Video has filed for bankruptcy. They've already drafted and put forth a restructuring plan to come out of debt. GameCrazy's fine, they're shutting down unprofitable HWV/GC/MG stores. GC isn't in danger as a company, and GS can't buy them out without also buying out MG and HWV. You know that if the company was in danger of going belly up, I'd let you guys know.

Speaking of dirty things CC does, anyone remember this gem about charging for backwards compatibility?

http://www.joystiq.com/2006/09/01/circuit-city-will-make-your-360-backwards-compatible-for-30/[/quote]


Wow Scorch, I haven't been here long and I knew that everyone hated CC, but with that link I can easily see why. Thats some shady crap.
 
I heard about this on the 29th and didn't bother putting this up only because I heard it from my girlfriends moms friend who works at a bank that does the banking for CC (wamu or wells fargo, I forgot which one).
 
They're trying to open a new store right near my house as we speak.
Weird. I knew they were in some trouble after all the firings, but I figured they were just in recovery mode.

My friend will be eager to hear about this, as he works at CC.
 
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