As expected, 2009 is bringing a massive wave of retail bankruptcies. Today brings news of the biggest yet: Circuit City will be closing all of their stores and winding down their business between now and March 31. This will leave Best Buy as the only national electronics retailer, with only a few regional (or much smaller, like Fry’s) competitors. Over 30,000 people will lose their jobs.
Given the relative ease of finding electronics online–a fairly commoditized good–CC’s weakness compared to Best Buy, and the vastly superior options offered by smaller, speciality chains (Fry’s Electronics, Micro Center), it’s surprising it took Circuit City so long to reach this point. For many years, Circuit City has offered a fairly poor store experience, with showrooms that feel trapped in the ’80s and offer limited selections. There was a time, not much more than ten years ago, when Circuit City’s commission-based sales staff was fairly knowledgeable, and Circuit City offered decent selections in certain verticals (their music selection was, until the late 1990s, amongst the best amongst general merchandise retailers). Apart from a few ingenious moves, such as an online feature that allowed you to reserve a product in a local Circuit City store and pick it up within 24 minutes–a great treat when you’re looking for a hard-to-find item–Circuit City hasn’t for many years looked like the behemoth it was when expanding across the country in the ’80s and ’90s, crushing smaller regional competitors like Lechmere in its wake.
Trouble started to appear in early 2007, when the economy was still quite strong. Circuit City made the famously insensitive move of targeting well-paid, highly trained, senior sales staff for layoffs, and then ineptly watched as the move was made public. A lesson here, guys: when your competition is the internet–a place without any sales staff at all–then don’t toss out your differentiating factor. Not only was it a devastatingly embarassing public relations move, but it was also the wrong strategy.
Also, Gottschalks, one of the last of the old-line department stores not called Macy’s, Sears, Penney’s, or Dillard’s, has filed for Chapter 11 bankruptcy protection. The famously dowdy Fresno-based retailer is one that we’ve had our eye on for awhile because their stores seem like relics from another era. Their merchandise mix is not especially contemporary when shoppers have been turning away from stores like these for years. So far, no announcements of store closings but watch them to come down the line. The loss of Gottschalks would deliver a painful blow to many small-town and second-tier western malls, especially in California’s central valley. In some cases, Gottschalks is the primary (or lone) remaining anchor for some of these malls (including at least one or two that I’ll be posting soon!)
Other bankruptcies this week include Against All Odds and Shane Co. jewelers.
well we’d known this was coming but what about everyone who’d bought hd set’s that are breaking down, so basically they’ve now got $1,000 bricks that are going to fail or are failing, but the going out of buiness sale should be good if you can find ps3’s or xbox 360’s for cheap.
I wouldn’t touch their liquidation sales with a 10′ clown pole. The liquidators who bought everything are known for raising the prices before chopping them. So in all reality when you think you’re getting 30-40% off, you’re paying more than it was being sold for 2 months ago.
I called my office to find out if they herd the news, & it turns out that they did. It isn’t a shock at all because the store by my place of employment was never crowded, even when times were good.
Not a suprise at all. It was only a matter of ‘when’, not ‘if’ they would go under.
Isn’t it rather common among most liquidators that prices are jacked up to MSRP (and over it at times) before they slash prices? That’s not a suprise either if that’s the case.
This goes with the grocer SuperValu cutting 50 stores.
Yikes. There’s a plaza with Home Depot in town that has, like Linens N Things and Circuit City RIGHT NEXT TO EACH OTHER. Yikes. I hope another electronics retailer is developed to fill the gap.
I still think the awful logo did them in.
A new shopping center being built in Pelham Manor NY first signed Home Depot, however they made the dessision not to open stores this year as expected. So Circuit City baught that lease & now they are going to that great mall beyond. Now the question is who is next to buy up that lease. I can tell you right now it’s not Walmart, because the village already said no to there plans to put a store on that site a year ago.
I just found this article in Retail Traffic, this should have raised red flags.
Circuit City’s Failed Auction Indicates Developing Excess Space Glut (12/23)
Dec 23, 2008 11:15 AM
Circuit City’s decision last week to cancel a planned auction of 154 leases due to lack of bidders could be another troublesome milestone for the rapidly deteriorating retail real estate industry. The market for excess space, once seen as a potential bright spot amid troubles in the sector, may already be becoming oversaturated.
The Richmond, Va.-based retailer, which filed for Chapter 11 bankruptcy protection on Nov. 10, instead signaled it may break the leases on 155 stores in all, representing 22 percent of the 715 domestic locations the chain operated as of Nov. 30. (One lease was not part of the planned auction). The portfolio of Circuit City stores slated for closure includes both stand-alone and in-line locations ranging in size from 15,280 square feet to 67,680 square feet, in 28 states with a large concentration of properties in Arizona, California and Georgia.
The auction had been slated for Dec. 18, but the company canceled the auction on the night before, after bankruptcy administrators informed it that there was not enough interest in the leases. Circuit City did not return calls for comment.
But the issue is much bigger than Circuit City’s leases. Many retailers are suffering sales declines, closing stores and slowing the pace of expansion. That’s creating a lot of excess space along with a shortage of potential replacements. While some segments of the retail industry are still growing—most notably discounters and grocers—there isn’t enough overall demand to absorb the space that’s coming to the market right now; especially in the mid-size big boxes Circuit City inhabits, notes Andy Graiser, co-president of DJM Realty, a Melville, N.Y.-based real estate disposition and restructuring firm that is handling Circuit City’s portfolio. As a result, failed auctions of excess retail space could become a common occurrence next year, according to Graiser.
“I think you just have to assume in most cases that if leases become available, it’s going to be a very, very, very dormant market,” says Graiser. “Which means landlords will have a lot of surplus for a while. It’s going to take a while to fill that space.”
This year, U.S. retailers have already announced 8,117 store closings, according to J.P. Morgan. In 2009, there could be twice as many store closings, according to Excess Space Retail Services, Inc, a Huntington Beach, Calif.-based real estate disposition and restructuring firm. (See “Store Closings Could Double in 2009.”
I hope someone can try to document Gottschalks before it’s took late. I’m goin to CA in march I hope it’s still there.
I’ve had mixed experiences with Circuit City, but I will say they just plummeted downhill after 2006 or so. Around 2004 the store near me was demolished and rebuilt with a brand new store that was clean and modern (also around the time they had the “we’re with you” rebranding and launched all of their new customer-friendly initiatives. At that point I was pretty happy with CC and even bought my first iPod from them.
Then they started treating the customer like crap. That’s the only way I can describe it- they started acting like customers were dumb as a rock. A friend of mine wanted to purchase a specific camera and they had only a floor display model left (with no box.) Upon asking if there was a discount, the manager came back and offered him a FREE “Firedog” training book on how to use a digital camera (“a $55.00 value!”)
In December of 2007 we had to return a top-of-the-line (for a Circuit City…) laptop that had cropped up with too many issues (defective screen, bad RAM, etc.) about 4 days after the initial return period, and they were out of stock of the same model, but wouldn’t offer a full refund. That left a really sour note and while I ended up doing a chargeback, that was it.
I was increasingly suspecting that the many factors that had been increasingly working against them over time(i.e. bad PR moves such as their 2007 decision to fire higher-paid associates, and hire new unproven ones at a lower wage, copying off Best Buy’s business model so much and not taking a different enough direction away from BB, etc.), would finally do them in. Changing their logo wasn’t the worst business decision they did, but it was an unnecessary one, as I preferred their older logo.
However, I didn’t totally hate CC. I did like them, if only for the fact that many shoppers often overlooked a local CC store I sometimes went to that was near a Best Buy, and could occasionally find items that weren’t in stock at the BB. I wouldn’t be surprised if by now this CC location was closed, since it was one of the first 150 or so stores that they announced would close in November.
Finally, I’m not surprised to hear of many shopping center vacancies that’ll be unfilled for some time to come, thanks to CC signing leases they never ended up filling.
What a shame, I liked their “the city” stores a lot more than a typical Best Buy.
Oh well, maybe I can get a decently priced Hard drive soon.
Hey Jonah, you don’t live in College Station, TX by chance, do you? I am a student at Texas A&M so I was just curious. There is a shopping center there that fits your description, with additional smaller vacancies that have not been filled since the place was built. In addition, Circuit City also has another vacant store across the street from Post Oak Mall.
@Jake: Yes. That’s the one! I’ve got some pictures of Post Oak Mall, so if they ever post a description…
Personally, I am sad that Circuit City is gone. Their customer service was always leaps and bounds better than Best Buy’s in my experience.
I am too sad that Circuit City is going/gone. Because of the locations, I shopped at Circuit City more and more use to shopping in there stops than Best Buy. The Best Buys are far for me so I don not have the chance to stop thier stops that much. Everytime I go to Best Buy , I get lost in the store. I feel that Circuit City has a better layout that Best Buy and Circuit City newer stores had a better look than Best Buy. IMO Best Buy has the better customer service but, Circuit City was close in the customer service department. The Best Buy has 2 years return policies and great service. Circuit City was ok most times.
It is sad to see Circuit City go. I hope Best Buy open up in Circuit City locations near me so I can shop ther more. Buy Best Buys stores look bigger than Circuit City stories.
Is there a good chance that Best Buy will open in old Circuit City locations?
There’s still a little hope left…Canadian Circuit City stores are still around. Maybe they’ll expand/spin off…?
I forgot to mention that Circuit City did have decent sales from time to time on items, one reason I liked them. From my past experiences, I agree with others that Best Buy customer service has more often than not been shoddy, and I see BB more as a store to go to when you know right away the exact product you want to get, and make an impulse purchase. I just hope BB doesn’t attempt to have less competitive pricing or decrease product selection in their stores, as a result of CC’s closure.
At least their closure will mean I may be able to find some items cheap, and give me more of a future incentive to shop at Micro Center. There is a Fry’s in the Chicago area, but it unfortunately is located in a part of the suburbs I don’t make it out to often. *sigh*
The Canadian stores are actually “The Source by Circuit City” chain, which are mostly former Radio Shacks that pulled out of the chain during a trademark dispute 4 years ago. Different size and concept, although I wonder how long The Source will last now.
I wonder how the closing will affect some cities in Virginia? Best Buy moving in? Ah maybe not…I know of at least two cities in that state ( Harrisonburg and Winchester that actually turned down Best Buy from opening up a store there in favor of Circuit City. Will Best Buy have a change of heart..that is a good question.
Another interesting this about this..I wonder if Kohls will try to pick up some of Circuit City’s business? Yes THAT Kohls !!! Reason I bring them up is that for almost 9 years I worked for them and I can remember a confrence call back in 2003 between our Kohls and the head people at corp. in Wisconsin. As I can remember Kohls was seriously ( or so they said to us back then anyway ) about the desire to start selling TVs and PCs once the electronics field gets less crowded ( it is now ).
Of course the economy today and back then are two diiferent things and Kohls right now are having issues of their own ( sales down and the reputation of being very anti-union ) so maybe the idea of buying a PC at Kohls won’t happen now.
meh i’ll just set and wait a while and hopefully the ps3’s and 360’s will be lowered say in feb.
oh and here in the richmond area store at chesterfield mall two on west broad street the city is near their corp offices the other one at short pump mall another one near ashland close to virginia center commons, one at southpark mall and the last one (alos one they just oppened up back in oct) at white oak
If I remember correctly the source by Circuit City was going to open at Xanadu near the new Giants stadium. Now is that up in the air?
Sean,
The Source was also planning an opening on Route 22 in North Plainfield. It will be sad to see Circuit City go…let’s hope these big box center canre lease their spaces soon.
From CC’s website.
Are you also shutting down your operations in Canada?
No, our Canadian operations will continue. They are not affected by the liquidation of Circuit City’s U.S. operations. The Canadian operations employ approximately 3,000 associates.
This maybe a stretch, but it could be possible to rebuild the chain through the Canadian opperation. It will be quite smaller but perhaps more nimble.
Mallguy,
What’s up. I hope we don’t end up with Walmart as the only big box left standing once the finantial fires are finally extingwished.
Many of these centers are in locations where the car is the only way to reach them, & despite lower gas prices people are increasingly making use of busses & trains to get around. I’m not sure how many of these places will be viable in a few years as strip malls.
I went to my local Circuit City store to check out any bargains, and the place was the most packed I have ever scene in my life. Alot of the TVs were already gone, but the bargains weren’t all that great… some things at 30 and 20 percent off and mostly everything else was 10 percent off. I was hoping the discount would have been more, but I did get a 4 GB memory card for about 13 dollars, which is a pretty good deal. And no, the liquidators did not raise the prices before the discounts, since I was looking at the exact memory card in the sale flyer earlier this week, which was priced at $14.99, and that was the regular price used for the discount. I’ll be sure to go back and visit when I come home again for president’s day weekend. Maybe I can stock up on some DVDs and CDs.
I really hope the find a good replacement for Circuit City, who has been short-circuited by the bad economy.
One hope is for Sears to create a spin-off electronics store to compete.
Yet Another Retailer Filing for Bankruptcy and Liquidating:
B. Moss Clothing files for bankruptcy, to close stores
By Emily Chasan
NEW YORK, Dec 2 (Reuters) – U.S. women’s apparel retailer B. Moss Clothing Company Ltd filed for bankruptcy protection on Tuesday and said it plans to liquidate, becoming the latest retailer to succumb to the credit crisis and downturn in consumer spending.
The company is seeking court permission to begin going-out-of business sales at all of its stores on Dec. 5. and shutter most stores by the end of the year, according to court papers filed on Tuesday in the U.S. Bankruptcy Court for the District of New Jersey.
The family-run retailer, which was founded in 1939, runs 70 stores throughout the United States and employs more than 700 people, according to court papers.
B.Moss had tried to sell itself, but a potential purchaser told the company in November it was unable to get financing to complete the deal due to a lack of availability of credit, according to court documents.
The company also said it had suffered from sales declines and a failed attempt to diversify its merchandise.
It listed assets of $13 million and debts of $10.3 million.
Clothing retailers have struggled in recent months as consumers cut back on discretionary spending.
In the past few weeks apparel retailers Steve & Barry’s and BTWW, which runs Western Warehouse and Boot Town stores, have sought bankruptcy protection and are closing all of their stores. Even bigger clothing retailers like AnnTaylor (ANN.N) and Gap Inc (GPS.N) have shuttered some of their stores this year. (Reporting by Emily Chasan; Editing by Anshuman Daga
Retail bankruptcies will be the story of 2009. With less disposable cash sloshing around our economy, stores that thrived in the good times will have no choice but to go out of business.
There is still P.C. Richard & Son where I live in Jersey, but Im going to miss Circuit City a lot.
I may be late on this news, but Lord and Taylor had to get 60 million from its owner this week. Maybe they might be going up for sale or closing soon. This is not good news at all; even though they pulled out of the Texas and Louisiana markets a few years ago.
On the Circuit City topic, our area mall has been hit. Mervyn’s closed at our Deerbrook mall in 2006. Steve and Barry’s took over the first floor of the closed anchor in early 2008. Circuit City took over the second floor of the closed anchor shortly thereafter. Maybe once they both close, Macy’s will use some of the space until they reopen their damaged store later this year. The Macy’s anchor at Deerbrook was damaged by Hurricane Ike, and is being completely reconstructed. Maybe we will get a Fry’s, they have been slowly expanding in Houston.
“For many years, Circuit City has offered a fairly poor store experience”
You’re being too kind. Circuit City’s store experience is/was among the worst in retail history.
I wouldn’t mind having a couple of Circuit City pylon signs planted in my backyard.
I visited my local Circuit City’s Liquidation Sale, only to discover that they were offering a mere 10% off LIST prices. These prices are actually much higher than anyone else’s sale prices.
But what was worse than Circuit City’s prices was the pissy attitude of the staff members. I understand these people are not happy about losing their jobs, but they literally went from potential customer to customer, harrassing them. They traveled in pairs and deliberately insulted people.
I was approached by two associates with a noticeable chip on their shoulders. I had an ad in my hand from Sunday’s newspaper and was simply looking for a particular TV, when one of them barked at me “what do you want?” Before I could even point to the item listed in the ad, he said in a snotty tone, “We’re owned by a liquidator so those prices don’t apply. If you wanted decent prices, you should have dragged yourself in here months ago.” I was so astounded, I just told him “10% above list price does not quality as a ‘liquidation’, and if your prices were so groundbreaking before, I’m sure the chain wouldn’t have gone bankrupt. Furthermore, your attrocious attitude surely contributed to the store’s demise”. Then I turned around and left. Everyone was leaving empty handed, and grumbling about their similar experiences. This is one chain I’m NOT sorry to see become part of retail HISTORY. Asshats.
Poor Circuti City, here in the Temecula/Murrieta area they had 2 store, one in each city, the first to go was “The City” in Murrieta just barely 2 months after opening, and now “Circuit City” in Temecula is going under…truly sad, and about Gottschalks, i am not surprised at ALL.
I liked that store but the one in Hemet was outdated! Target is opening a Super Target store in Murrieta to replace the one they currently have and i thought “Boy, Gottschalks would look so nice in there!” but now… 🙁
I’ll try and take as many pictures as i can of Gottschalks, and i dont care if they go all “please no pictures in here” kind of crap, their time is almost up!
well Im goin to give my take on circuit city. it wasnt one of my favorite stores. when they post an item in the sunday paper you expect it to be at the store. when you go there,you leave dissapointed that the item you wanted isnt in the store. is everyone buying that item?? maybe?? or they just dont have it period this happens everytime at circuit city. when Im in the store I had to look almost the whole entire store just to get some help.poor service and then you wonder why they are going out of business. I never have those problems at best buy they are on top of everything thats why they are goin to stay around for awhile and I love using the reward zone lol. well I live in woodbridge,nj and if some of you jersey know the woodbridge crossing shopping center next to woodbridge center has circuit city as well as a closed linens and things and a soon to be closed great indoors there is gonna to be a lot of empty space in that shopping center what a waste to build that plaza if they are going to close everything they shoulda left the devry campus there thats my 0.02 cents there
I currently work at CC.
I have only worked there about 9 months.
I seen this coming from a mile away, the big wigs really did not make good business decisions.
As for me personally, I sold televisions and everything in that aspect.
I had many happy customers, and as I can remember only 5 angry ones.
I really did love teaching people about the merchandise I was selling. (mainly older generations who were confused about these new age products.)
I would often ask them, what it was like back then. I found there stories about the 1950’s 60’s 70’s and 80’s so fascinating.
How technology and stores have changed.
I really was a friendly, accurate, and up beat sales man.
But the company didn’t care about that, the company always told us the same thing;
“Sell everything, even if the person doesn’t need it, sell it! Lie to them and tell them they NEED it.”
See, I never played into that gimic my mangers forced on us, I was honest and straight forward. I sold what they needed and never lied to any of my customers.
For that fact, I had MANY loyal customers that knew me by name. We shook hands and talked about many off topic subjects such as politics, sports, history of electronics, economy.
I learned a lot from them as well.
I gave many people smiles, and I even got a few hugs.
I did it the right way. Friendly, and honest.
I even let customers that were really confused on hooking up there television, vcr, cable, etc… personally call me if they had any questions.
It gave me so much joy to see someone who was confused, walk out 100% informed and happy.
I cant say the same for the co workers, or for anyone else who worked at CC.
I’m going to miss teaching people. That was my favorite part, the REASON why I got the job.
Oh btw, I was employed to one of the oldest CC in this area, built in 1987 it still had the “plug” shape. The interior SCREAMED 1980’s!
Even the smell.
As a fan of dead malls and such, I loved it. ha.
Chris,
Thankfully Woodbridge has a strong retail base. The loss of one retail center won’t hert that community. Perhaps a movie theatre could be built in that location since the nearest one is at Menlo Park Mall.
I think Woodbridge Crossing would be a great location for IKEA…it’s very close to the major highways and there’s already a parking deck!
Ken, salesmen who are as you describe yourself are a dying breed. Most electronics stores have salespeople who know almost nothing about what they’re selling and will say anything to convince a person to buy a product. Even back in 1988, I found that most salespeople did not know much about the stuff they were selling. I’d research everything and know what I wanted in what I was buying and would go in and in the discussions with salespeople, would hear all kinds of false or wrong information from salespeople, and I had to wonder how much of it was simply ignorance and how much of it was intentional just to try to persuade someone to buy something.
My favorite stores to visit through the years were the ones that had a long-time person working there who was really “into the business” and knew all about what he was selling and was honest.
Ken, thank you for your integrity!
I agree with you mall guy at least that shopping center is good for one thing car meets hahaha im going to a honda one tommorow night but seriously yea I would love to see an IKEA in woodbridge why not??? at least I dont have to go to elizabeth anymore and not worry about getting car jacked in broad open daylight
Ahaha no, North NJ has enough IKEAs already.
We have 2 IKEAs in North/Central Jersey: Paramus and Elizabeth. Woodbridge is about 15 miles south of Elizabeth and 30 miles south of Paramus. Putting IKEA in Woodbridge Crossing would make IKEA more accessible to those who live down the shore, as well as those who live along the Middlesex/Mercer route 1 corridor. Plus, that building is already large enough and it just needs a redo on the inside to accomodate an IKEA.
Better yet move the Elizabeth store to Woodbridge. The road access includes rutes 1/9, 440, I-287, I-95 & GSP. I rather drive to Woodbridge than Elizabeth any day.
Although the Paramus location is closer to where I live.
Just saw a really cheesy TV commercial for Circuit City’s Going out of Business Sale – with a loud announcer reminiscent of a race announcer.
Current annoncement on Circuit City’s website:
Circuit City would like to thank all of the customers who have shopped with us over the past 60 years. Unfortunately, we announced on January 16, 2009, that we are going out of business.
For the most current information regarding Circuit City and our store policies, please refer to the links below:
» Read the press release about Circuit City’s liquidation
» For the latest answers to questions regarding current store policies, visit the Breaking News section of the Circuit City Investor Relations website. The FAQs available there are updated as we receive new information, so feel free to keep checking back for the latest
» Circuit City is currently hiring temporary labor to assist in the store liquidation process. If interested, visit the Circuit City jobs site
(Who wants to help CC die? )
Best Buy’s Dunn: More Retail Trauma Ahead
Matthew Boyle
February 3, 2009
The incoming head of retail giant Best Buy (BBY) expects more consumer electronics retailers to follow Circuit City into the dust bin of history this year.
Brian Dunn, a 22-year company veteran who will take the reins from Brad Anderson in June, told BusinessWeek on Jan. 29 that “there will be other storefronts that close this year” because of what he termed a “lethal” retail environment. That environment grew even worse on Feb. 2 with news that consumer spending dropped 1% in December, worse than the 0.8% drop that economists had expected.
Best Buy has struggled along with its retail brethren, reporting a 6.5% drop in same-store sales in December amid a decline in store traffic. The company is cutting costs left and right to boost profitability, slashing its $1.2 billion capital expenditure budget in half by opening fewer stores in Canada, China, and the U.S. Even though 500 workers in its Minneapolis corporate headquarters agreed to leave voluntarily under an enhanced severance program announced in December, the company said on Jan. 27 that it would have to resort to involuntary layoffs as well. An unknown number of employees will be let go on Feb. 19.
No Joy in Rival’s Demise
Despite its struggles, Best Buy should benefit from Circuit City’s disappearance — indeed, Anderson said in Davos last week that Best Buy was actively scouting vacant Circuit City store sites. “I didn’t open a bottle of champagne when Circuit City closed,” said Dunn, who has been at the company long enough to remember when Circuit City, not Best Buy, was the dominant player in electronics retailing. “I take no joy in it, but I have every intention of capitalizing on the opportunity.”
If Dunn’s forecast holds, there will be even more carcasses for Best Buy to pick at in the coming months. “The notion of just hanging on is very difficult,” he said. “Strong brands come through this. Brands that aren’t strong, with good financial and cultural strength and a meaningful position with consumers, will have a difficult time coming through this.” When asked to name specific retailers who might go under, Dunn demurred, but said, “There’s a list of them.”
Radio Shack (RSH) is no doubt on that list. “I don’t want to make pronouncements on [Radio Shack’s] future, but they are struggling,” says Alan Wolf, senior editor at industry newsletter TWICE. Wolf notes that Radio Shack’s core mobile-phone business has been eroded by the growth of retail outlets from carriers like Verizon (VZ) and Sprint (S) as well as by Best Buy’s burgeoning mobile-phone business.
Radio Shack does brisk business in set-top digital converter boxes, but those sales will dry up once the switch from analog to digital goes into effect later this year. CEO Julian Day has said that the sales generated by converter boxes “significantly contributed to our results during the last two quarters.” Radio Shack will announce results for its fourth quarter and full fiscal year on Feb. 24.
Eventually, Big Opportunities
Best Buy’s new leader said he’s positioning the company “not just to duck and cover, but to come out of this and grow. There will be huge opportunities coming out of the back side of this difficulty.” TWICE’s Wolf agrees, saying that “there will be pent-up demand, and the guys still standing will do very well.” Best Buy would be at the top of that heap, Wolf says, along with Wal-Mart Stores (WMT) and Amazon.com (AMZN).
Well, changes ARE already taking place at Best Buy stores. Not just within the company’s innards, but also at its B&M stores. They’re cutting out departments in their stores that don’t move as much merchandise, moving sales from those areas to online-exclusive. The freed up space will be used to expand other areas that will make them more cash, and thus, keep them afloat.
Matt, what are they moving to online only?
Well, for example, while sales of things like DVDs and CDs are certainly dwindling down due to online methods of obtaining them, they’re going to cut back or outright eliminate some categories / genres. One of my other hobbies (other than retailing history / exploration for this blog and others) is ‘anime’. Something that the once-plentiful Suncoast chain (one that is also literally dead, save for a couple dozen locations left in the entire country) heavily dealt with. Well, Best Buy is basically cutting back the section and making room for more TV show DVD sets and BluRay discs, which understandably, sell more SKUs per box / pallet than some niche genre like anime (you can throw Britcoms in too as another niche genre in the DVD marketplace).
I’m not sure what ‘departments’ they plan on ditching though out of their hard goods…ie: electronics, computers, appliances, etc.
You can now add Fortunoff to the list of retailers on life support.
Fortunoff files for bankruptcy, again: Iconic LI retailer seeks buyer as it enters Chapter 11 for second time since February 2008
Keiko Morris
February 5, 2009
Feb. 5–Fortunoff, Long Island’s iconic retailing chain of home goods and jewelry, filed for bankruptcy protection Thursday, the company said.
Fortunoff filed for Chapter 11 bankruptcy protection with the intention of continuing to look for a buyer, according to Fortunoff chief executive Charles Chinni. He noted that the country’s economic crisis had affected the jewelry and home goods retailer quite severely.
“The jewelry and home goods businesses have been hit particularly hard by the economic downturn,” Chinni said. “However, we are actively seeking a buyer for the business, and we will continue to do so in the Chapter 11 process.”
For many Fortunoff vendors, the situation is a repeat of February a year ago, when the retailer filed for bankruptcy protection the first time. NRDC Equity Partners, a Purchase-based, private-equity firm, purchased Fortunoff from private equity firms Trimaran Capital Partners and K Group in March.
The main difference, said one vendor, who asked not to be named, is that the news of Fortunoff being put up for sale caught many, including Fortunoff account managers, off guard. NRDC was moving ahead with plans to consolidate various Fortunoff operations with Lord & Taylor, another retail property owned by NRDC, the vendor said. The Fortunoff store in Manhattan closed in January, with a plan to fold a part it into the city’s flagship Lord & Taylor location. Sale negotiations abruptly halted plans to move its jewelry operations into the Lords & Taylor location.
By Jan. 23, Fortunoff told the vendor it was not paying any bills.
“They were moving forward,” the vendor said. “Lord & Taylor was moving Fortunoff jewelry into its stores. They already started layoffs in each department because of the consolidation literally just days before. This came out of nowhere.”
Fortunoff employs about 900 people on Long Island. Besides its flagship Westbury store, other locations include outdoor furnishings and accessory stores in Melville and Smithtown, and a furniture clearance store in Garden City.
i finally made it by a Circuit City since the disappointing announcement. mainly to have a final look before they are gone for good, but also to see if there are any deals worth taking. first of all, i hadn’t been into one of their new style stores, since the one i lived by was a relic that looked like CC of old (it was still in the old “plug” building although the red had cream stucco over it). it struck me how much the place had become a Best Buy copy cat, right down to the actual layout of the store! i mean, this place was laid out identically to the BB in Lewisville! anyway, it was a sad sight to see empty display shelves, empty sections of the store roped off, goods in piles on the floor everywhere, and not a soul anywhere on the sales floor to help customers. their TV selection was down to a few plasmas and LCDs that were either quite big (50″+) or small (22″ down). their stereos were mostly open box or display models, their speakers were a large lot of mismatched bookshelf speakers or a few tower sets, and the rest of the store was similarly picked over. as i looked at stuff, i did note that a lot of items, particularly the computers and accessories, were marked up and then put on sale, so some of the deals weren’t as good as they seemed to be. for example, a wireless router i looked at was 50% off, but marked up to $200 first. i bought the same unit for $85 at Staples! other deals were pretty good, like the CDs, which were 50% off. i ended up walking out with a couple of Jay-Z and Wu Tang CDs and a couple of the Nerf sports packs for the Wii ($20 each! awesome!) and bid Circuit City a final farewell. what sad times these are…
Filene’s Basement filed for Chapter 11 today 🙁
Here’s the article.
Filene’s Basement Files for Chapter 11 Bankruptcy Reorganization; Agreement Reached for Sale of 17 Stores to New Operator
May 4, 2009
WILMINGTON, Del., May 4, 2009 /PRNewswire via COMTEX/ — Filene’s Basement today filed to reorganize under Chapter 11 of the Federal Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.
Concurrent with the filing, the company announced that it had entered into an agreement, subject to Bankruptcy Court approval, with an affiliate of Crown Acquisitions to purchase 17 of the chain’s 25 stores, including the flagship stores in Boston and Union Square. Crown, which is based in New York, intends to continue to operate the stores under the Filene’s Basement name, while maintaining the chain’s value merchandising model.
Crown is one of the largest and most successful real estate and asset management firms in the country, with an ownership interest in more than 15 million square feet of retail and office property throughout North America. Crown previously owned and operated the Young World chain of retail stores in five states.
The contract with Crown is subject to a Bankruptcy Court auction under which additional offers for the 17 stores, the remaining Filene’s Basement stores, and other Filene’s assets will be solicited. The auction is expected to be held in approximately five weeks, subject to the approval of the Bankruptcy Court.
“This transaction provides an excellent opportunity to continue the Filene’s Basement tradition of top-quality apparel at low prices in most of the chain’s marquee locations,” said Scott Rusczyk, President of FB Acquisition II, the Buxbaum Group affiliate that acquired Filene’s Basement on April 20.
Advisors to Filene’s Basement include Alan Cohen, who was engaged as Chief Restructuring Officer, and Pachulski, Stang, Ziehl & Jones LLP, which was retained as counsel. Morris Missry and Scott Lesser of Wachtel & Masyr, LLP, and Arthur Steinberg of King & Spaulding advised Crown Acquisitions in connection with this matter.
About Buxbaum Group
Buxbaum Group, based in Agoura Hills, Calif., has built its reputation for over 30 years as one of the largest liquidators and appraisers of retail and wholesale inventories across North America. While continuing to operate in those areas, the company has shifted its primary focus in recent years to turnaround investing.
SOURCE Buxbaum Group
Circuit City like the phoenix rises again. However it is an online only opperation.