Electronics chain to liquidate, shut down

Jan 17, 2009 (Asbury Park Press - McClatchy-Tribune Information Services via COMTEX) -- CC | Quote | Chart | News | PowerRating -- All hope faded Friday for bankrupt electronics chain Circuit City Stores Inc.

The company said it will liquidate and close its remaining stores, including locations in Eatontown and Brick, after it failed to find a buyer or financing to continue operations.

All told, 567 stores will close and 34,000 employees will lose their jobs. Going-out-of-business sales will start as soon as today and run as long as it takes to sell everything. The company expects to wrap up operations by the end of March.

""We are extremely disappointed by this outcome," said James A. Marcum, vice chairman and acting president and chief executive officer, in a statement.

Richmond, Va.-based Circuit City filed for Chapter 11 bankruptcy protection in mid-November, a week after it said it would close 155 poorly performing stores, including its Freehold Township location.

Reactions were mixed on Friday.

Monmouth Beach resident Suzhen McCarthy left the Eatontown store without buying a camera she had hoped to buy. ""The prices are not very good," McCarthy said. ""It should be cheaper."

About a month ago, Eatontown resident Roman Vays walked into Circuit City to buy a 42-inch LCD television. The price there was $200 more than at another nearby store, Sixth Avenue Electronics.

""I asked them to match the price and they wouldn't," Vays said. ""I walked out and bought a TV at Sixth Avenue Electronics."

But Brick resident Doug Kerken has had good experiences at Circuit City, he said. He has bought three televisions at the Brick store, the latest one over the holidays.

""I am a smaller-store type of guy, I guess," Kerken said. ""I like Circuit City, and I'm bummed they're closing."

Belmar resident Mitch Llewellyn said he liked Circuit City's ""cut-rate" prices. ""I am sorry to hear they are going out of business," he said.

Circuit City's death knell is the latest outcome of a dismal holiday season for retailers. KB Toys and Linens 'N Things announced late last year they were going out of business.

Stores have been hit by a bad economic storm, including waning consumer confidence and a weak retail environment as consumers cut down on spending. At Circuit City, the company's vendors became uneasy, tightened credit terms or required payment in advance.

Sales declined at Circuit City as a result of the competition from No. 1 electronics retailer Best Buy and other stores, such as Wal-Mart.

Retail analyst C. Britt Beemer said Wal-Mart will be the beneficiary of the closure as 45 to 75 percent of Circuit City customers shop there already.

Customer loyalty took a hit in 2007 when in Circuit City fired 3,400 of its veteran employees and replaced them with workers who made less money.

""When a company abuses its trust with its employees, I'm just one person who will never deal with them again," Lacey resident Bill Erickson wrote in an e-mail.

At one time, Circuit City was a top television seller. But Best Buy, which had stores that appealed to younger consumers, gained the upper hand and took away business, Beemer said.

""It will be a great lesson someday at the Harvard Business School on how to screw up one of the truly good companies of America and do it in five years or less," Beemer said.

The company said it would honor gift cards throughout the liquidation sales. Circuit City's extended warranties, which are backed by third-party independent companies, are not affected by the company's closing, Circuit City said.

Circuit City credit cards are served by Chase Card Services and are not affected by the company's announcement, spokesman Bill Cimino said.

To see more of the Asbury Park Press, or to subscribe to the newspaper, go to http://www.app.com Copyright (c) 2009, Asbury Park Press, N.J. 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.

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index