Circut City Closing Stores

[launderess]

Online Retailers

Are really killing many brick and mortar electronic stores. Worse stores find they not only have to compete on price (which is hard to do with a store that does not have to pay "rent" on physical spaces in high traffic areas), but many customers only come to your store to "kick the tires" and otherwise research items they are going to purchase online.

This hit stores hard in states and cities with high sales taxes. At 8.70%, taxes on high end electronic purchases in NYS/NYC add up. Especially for big ticket items like HD TV's and perhaps all the equipment to go into a home theather.

Really is the same thing that is killing appliance stores.

Filing for bankruptcy will allow CC to get out of some contracts, especially leases on stores they need to close.

 

[whirlcool]

I agree with you totally Laundress. Not only are their prices higher than everyone else, but some people will buy anything just because it is on sale. And that's what I think CC is counting on.
Right now, I'd be worried about any purchase at CC, will they still be here 8 months from now to honor your warranty on an item you purchased from them today. I think next we'll see the chain contract some, i.e. pulling out completely from some cities.
Another thing CC didn't have was enough spread amongst the product lines it does carry. They just didn't have enough selection amongst the brands they carried. It seemed like they just carried a handful of models from each mfgr. So I found CC to be a rather dismal place to shop.
I am guilty of going to stores to do research on items I want to buy online. When we recently bought our new DW & range, HD gave us a good price. But it wasn't as good as their online price was. I mentioned this to the saleslady and she instantly matched the online pricing and gave us free delivery.
So I agree, retailers will have to match online retailers in order to succeed as you stated. And that will be a tough one to match.


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[launderess]

Case In Point

Just ordered a digital camera from Sears online for $119. Same item was $179 at CC, with only ten percent off (and they still sold out). Even with having to purchase a memory card, one still came out ahead with Sears, especially because they are running another of their "free shipping" deals. Put the camera on my Sears card, and will pay off the lot when bill comes due next month.

Could have purchased a more expensive camera to qualify for Sears "Interest Free" credit offer, but that dog rarely hunts with us. Always, ALWAYS only charge what one can pay off each month without gimmicks when it comes to Sears. At 22% interest, it does not do to play around.

 

[launderess]

Not only are their prices higher than everyone else, but som

How so true.

Will say it agian, ten percent off already inflated CC prices is not doing anyone who knows what they are doing a favour. Especially when all items are final sale and no return at any CC store. More so now that the whole lot is in Chapter 11.

Again, bottom hanging stuff is flying out the door, especially small LCD/Plasma sets from off the wall Asian makers, but really large stuff is still sitting around.

Will be interesting to see if the remaining stores, not originally slated for closure will be able to get any of the latest models of electronics for the holiday shopping season. Vendors probably are going to want money up front.

L.

 

[whirlcool]

Vendors probably are going to want money up front.

That's what the DIP (Debtor In Possession) financing is all about, somebody is co-signing for their purchases for the holiday season. It's the only way they could come up with the financing to even be around for this holiday season. If the DIP financing (usually a investment group provides this) decides that they want to discontinue their agreement with CC, then the end will come very suddenly. I say watch for their holiday season performance. That will tell the story of where they end up. With the economy in the current shape it is, it isn't going to be a pretty sight.