UPDATED Monday 9/19/09: Common Questions Answered
Bargain hunters have been lining up since Saturday ...as the troubled chain gets ready to close for good.
But as the liquidation begins, many existing customers have questions about their merchandise, gift cards, and warranties.
So I'll try to answer some of them, based on information on Circuit City's website and the site "Consumerist.com."
Will gift cards be honored?Yes, but use them soon. When the store is done, so is your gift cad.
Are Extended Warranties still good?Fortunately, yes. Circuit City's Advantage Plan is run by a third party, and is still valid. However, you may not be able to get annual cleaning and service.
What about mail in rebates? Those are iffy: You may or may not receive yours, depending on when you mailed it in, and if it was a CC rebate or manufacturer rebate.
Can you return anything? If you bought it before January 16th, you have till January 30 to return it. Nothing you buy now can be returned: All sales are final, even if it turns out to be broken.
Are the Deals great?
According to the Consumerist and other web postings, no. Everything is marked down off full list price, so you may find better deals elsewhere.
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Original Report: 1/16/09It was the store closing that surprised no one: After layoffs, a bankruptcy filing, and plummeting sales, Circuit City is no more.
But while we finally know what this means for the store, many customers still dont know what this means for them.
Losing a Popular StoreCircuit City was the second largest electronics chain in the country.... and without it, shoppers will face fewer choices, and possibly higher prices, down the road.
For that reason, customers we spoke with were sad to hear it's done.
Earl Hamlin told me "I'm sorry to hear that. Thats the last thing we need in this economy: another retailer going out of business."
Customer John Haygood told me "I think its a shame. I enjoyed their electronics. That's a shame to see another store going under."
Before you Shop for BargainsGoing out of business sales will begin immediately...as a liquidator takes control of the chain's inventory.
But there are some important things for customers to know:
- All sales are final...That means no returns for any reason, not even for a TV that won't work.
- Gift cards will be honored during this liquidation sale: good news.
- For customers with service agreements or extended warranties: Contact the warranty company to see if you are still covered...It all depends on who is behind your warranty.
- Just because it's on "sale" doesn't mean it's a great deal.
- In a liquidation, you typically don't find major discounts until a few weeks into the sale.
Just Keep in Mind...The saddest part of this story, however, is the tough news for Circuit City's 30 thousand employees.
If you're upset about the status of your warranty....just think of the people who work there, who now have to find new jobs in a very tough economy.
As always, don't waste you money. I'm John Matarese.
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Full AP Report:By MICHAEL FELBERBAUM and VINNEE TONG
AP Business Writers
Circuit City Stores Inc., the nation's second-biggest consumer electronics retailer, said Friday it had run out of options and will be forced to liquidate its 567 U.S. stores. The closures could send another 30,000 people into the ranks of the unemployed.
"This is the only possible path for our company," James A. Marcum, acting chief executive, said in a statement. "We are extremely disappointed by this outcome."
The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable. And bleak holiday sales results further weakened even the stronger retailers.
Circuit City said in court papers it has appointed Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC as liquidators.
"Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders," Marcum said.
Shareholders are likely to receive nothing, as is typical in bankruptcy cases. It was unclear what would happen to the company's 765 retail stores and dealer outlets in Canada.
Circuit City filed for Chapter 11 bankruptcy protection in November as vendors started to restrict the flow of merchandise ahead of the busy holiday shopping season.
It had been exploring strategic alternatives since May, when it opened its books to Blockbuster Inc. The Dallas-based movie-rental chain made a takeover bid of more than $1 billion with plans to create a 9,300-store chain to sell electronic gadgets and rent movies and games. Blockbuster withdrew the bid in July because of market conditions.
Circuit City, which said it had $3.4 billion in assets and $2.32 billion in liabilities as of Aug. 31, said in its initial filings that it planned to emerge from court protection in the first half of this year.
Under court protection, Circuit City has broken 150 leases at locations where it no longer operates stores. The company already closed 155 stores in the U.S. in November and December.
U.S. Bankruptcy Judge Kevin Huennekens had given the company permission to liquidate if a buyout was not achieved.
The liquidation is the latest big blow to the nation's malls, which have suffered from a rise in vacancies as a slew of chains from Mervyns LLC to Linens 'N Things have liquidated. But analysts say that the demise of Circuit City, whose stores range in size from 20,000 to 25,000 square feet, will hurt the fortunes of mall operators even more.
"It will bring to market a glut of big box spaces across the country," said John Bemis, head of Jones Lang LaSalle Inc.'s retail leasing team. "It will have one of the largest impacts on big box real estate across the country."
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AP Retail Writer Anne D'Innocenzio contributed to this report.
(Copyright 2009 by The Associated Press. All Rights Reserved.)
