Circuit City clears shelves ahead of closure

Stephen Withers
Sunday, 18 January 2009 17:43

IT Industry - Strategy

Circuit City, which filed for bankruptcy last November, is closing its remaining 567 stores. Shoppers rushed in for liquidation bargains.

Circuit City was the second-largest consumer electronics retailer in the US. It had been struggling for a couple of years, and the tightening of credit that occurred around last September caused severe problems.

Add a slower than usual holiday shopping season, and Circuit City was in real trouble.

After a possible sale fell through, winding up the company was the only option remaining, according to acting president and CEO James Marcum.

"We are extremely disappointed by this outcome," he said.

Some 34,000 Circuit City employees face redundancy.

Ironically, queues were seen at various Circuit City stores over the weekend, as buyers flocked to make purchases at 10 to 30 percent discounts. It seems likely that further price cuts may be seen as the liquidators seek to empty stores as quickly as possible to avoid ongoing costs.

Individual stores will close once they have cleared their stock, and the last stores are expected to close by the end of March.

Circuit City gift cards only have value while there are stores still open, so if you received on for Christmas, it seems sensible to use it sooner rather than later.

According to the company, extended warranties are provided by a third-party company and will continue to be honoured after the company closes down.

Circuit City will continue to operate in Canada, where there is a total of 765 retail stores and dealer outlets.