Circuit City files for bankruptcy, will close St. Louis store
Giant tech retailer Circuit City has filed for Chapter 11 bankruptcy protection, the company reported today, just one week after the chain said it was shuttering stores around the country, including one in suburban St. Louis.
Chapter 11 means Circuit City will be allowed time to restructure its debt and continue operating through the holiday shopping season, according to a statement released by James Marcum, vice chairman, acting president and CEO of Circuit City, the No. 2 tech retailer in the nation behind Best Buy.
He said the flagging economy and resulting decline in consumer spending was primarily responsible for Circuit City’s actions. About 17 percent of the chain’s estimated 40,000 employees will be affected.
“We know there is never a good time for individuals to be impacted by decisions like these, and we deeply regret the effect this has on our associates,” Marcum said in the statement.
He added however that the company will continue to honor its warranty and service-plan obligations made to its customers, so nobody who has shopped at Circuit City need worry that their purchases will lose protection.
The company had announced last Monday it was closing 155 of its 566 stores nationwide, including four stores in Missouri. The one store affected in the St. Louis area is at 3344 Pershall Road in Ferguson, just off Interstate 270 near the Florissant Valley campus of St. Louis Community College.
Other stores could close later, though. The bankruptcy announcement also states that Circuit City will re-evaluate existing leases and try negotiating them to save money, but may shutter stores where lower leases cannot be obtained.
Circuit City made bad business decisions for a long time. The “me-too” process whereby they located most of their stores within sight of a Best Buy — completely mind-boggling. Add to that the decision to “cut costs” by eliminating their best-trained, best-equipped staff and replacing them with jobs paying fast-food wages, decimating morale and removing the only real advantage (customer service) that Circuit City might have used to compete with Best Buy.
Schoonover ran Circuit City into the ground. The current management couldn’t right the ship in time to prevent a bankruptcy filing; hopefully they’ll now get the time they need to salvage the company.
After they fired all their top sales clerks last year because they “made too much money”, and replaced them with minimum wage teenagers who knew nothing about what they were selling I swore I’d never buy another thing from Circuit City. Instead of cutting the fat out of the bonuses at the top, they cut the workers. So this is their own doing and I’ll be glad to see them go under. I could care less what they do, I stand by my word that this household will never buy another thing from Circuit City.
Another factor is that if you look around…most of their stores look almost the same as they did when they opened well over a decade ago. Who wants to shop there if it looks like a pit all the time?