Circuit City Under Siege

The dying retailer's liquidation sale has long lines of curious shoppers and few bargains of note so far.

By  |  Sunday, January 18, 2009 at 9:55 pm

Circuit CityThey’re the grim reapers of failing retail chains, except they brandish going-out-of-business signs instead of scythes. And they were surrounding the Circuit City a couple of miles from my house today, which, like the rest of the company’s 500+ U.S. stores, is liqidating its stock as the company goes out of business. When I drove up to the store, I was startled to find a long line of customers waiting to get in, snaking all the way to the Sports Authority next door–maybe the longest such line I’ve ever seen that wasn’t at a store with a fresh batch of iPhones or Wiis. (I sure never saw lines like it when CompUSA, Good Guys, and other defunct chains held their liquidation sales–but perhaps today’s economic climate is leaving shoppers obsessed with finding bargains.)

I joined the line, and got the impression that other folks had joined it in part because they saw a line and figured it was worth joining. (Or at least the woman behind me seemed unclear on the concept–she asked what was going on in the store, and why were were all queuing up.)

A CNet reporter said he found “pandemonium” inside a Southern California Circuit City; this one, just to the south of San Francisco, was relatively sedate inside. Actually, there were fewer people in line to buy stuff than I usually see at Best Buy on a Saturday afternoon. The store felt downright lonely, in part because it was full of staffers who knew they were about to be unemployed, tables of open-box merchandise, items scattered in the aisles, and TVs forlornly playing a video loop arguing that you should buy a TV from Circuit City because of its great post-purchase service.

It was easy to tell why so few people were filling their carts with gear: The deals to be had were far from spectacular. The signs outside promised “Up to 30% OFF,” but a more direct claim would have been something along the lines of “Most hardware 10 percent off, software 20 percent off, and good luck if you find anything in the store that’s 30 percent off.” If your goal was to get the best possible price, you could probably beat even Circuit City’s liquidation prices without trying very hard by going online. Which is presumably one reason why Circuit City was forced into bankruptcy in the first place.

If Circuit City’s liquidation follows the usual pattern, the discounts will get larger as the shelves grow barer, and within a few weeks the stores will be left with items that you don’t want to buy even at 80 percent off. After the jump, some bad iPhone photos from my visit, which left me melancholy about the death of the 60-year-old merchant even though I was never a big fan in the first place.

Line Outside Circuit City

Circuit City--Store Closing Sign

Circuit City All Sales Final

Circuit City No Checks

Circuit City Boxes

Circuit City Clearance

Circuit City Customer

Circuit City Customers

Circuit City Blank Discs

Circuit City DVDs

Circuit City iPods

Circuit City PC Shoppers

Circuit City More Boxes

Circuit City HP Discount

Circuit City TV

Circuit City Verizon Sign

Circuit City Hot This Week

Circuit City Checkout


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18 Comments For This Post

  1. Lance Jungmeyer Says:

    That’s pretty lame, but seems to be in keeping with the liquidation strategy of big box retailers, and other corporate retailers. I recall similarly weak “bargains” when Osco liquidated stores in Kansas City.

  2. usblues Says:

    Even with the liquidation “discounts” their prices are still way higher than if you buy the same thing online. Often i’ll go into the store, check out a product, and then buy it from Amazon and save 25-50% .. I’ve been using this site to find some good deals online:

    It’s a free service that tracks prices of products from online stores (like amazon) and sends you an email when the price drops.

  3. LawrenceJ Says:

    The ‘vultures’ are packing stores looking for bargains because they didn’t find them during the holiday shopping season. They’re holding on to their money and kept waiting and waiting for big markdowns to come, but never really materialized for Christmas. Now, they see a chain going under and are chomping at the bit to spend their cash- but even they can see that these aren’t bargains yet.

  4. forkboy Says:

    usblues comment is an interesting take on modern American consumerism. American consumers want to go to a brick-n-mortar location, look over the merchandise, play with the merchandise, speak with a sales person (if they are knowledgeable), look over the merchandise again….and then go home and try to find a better price online.

    Is it any wonder stores are closing their doors for good? How can consumers expect brick-n-mortars to survive if purchasers aren’t willing to pony up the extra cash that is the norm at physical stores. It would seem that lots of folks do not mind a local store making the expenditures to have staff on hand, product on hand, the lights on and the doors open, but perish the thought they should have to pay a bit more for that service.

    I have a pretty steadfast rule about purchasing items, especially consumer electronics: even if it costs me more I will buy from the physical store if they took the time to show me the goods, answer my questions and genuinely help me during the decision-making process. If, on the other hand, I’ve done all the research and haven’t utilized the a store for information gathering, then all bets are off and online purchasing is quite reasonable.

  5. skywyze Says:

    I agree with forkboy. Those are my rules for consumption also. With monitors and TVs too, check out the return policies of online stores vs. brick and mortar, and no shipping fees to return to brick and mortar either. I wasn’t a great fan of Circuit City, but did buy a few things via their website and used that ready for pickup in 24 minutes deal they had. Well worth it, but otherwise the big blue store beat them out with in store help and ease of purchase. Before the 24 minute rule, I remember waiting for the warehouse personnel to bring me my purchase for what seemed like hours because it items were rarely stocked on the shelves.

  6. JELaBarre Says:

    I went by the store in Poughkeepsie, NY, and I have the impression it must have already been grossly understocked *before* the chain declared bankruptcy. It’s probably the case for everyplace else, although the Hudson Valley and Catskill regions in NY have been economically depressed for a number of years now, and CC probably didn’t expend a lot of effort here. So if there wasn’t much stock to begin with, there won’t be much opportunity for bargains now.

  7. Brian Says:

    I actually heard (from Consumerist?) that the liquidation company that handled CompUSA is handling the CC liquidation. when I went into CompUSA during its death throes, I noted that they had marked items UP to their original MSRP (even if street value was 30% less already), in order to take their “up to 30% markdown” off. In some cases, there were actually markdown stickers on the boxes over the pre-closing sale price stickers that were HIGHER than the ones underneath.
    No deals there.
    So, let’s see…. OfficeMax started this trend, then CUSA followed, and now CC. Each store had a period in which they were renowned for offering some staggering deals (75% markdowns weren’t commonplace, but they were frequent) that would at least keep them relevant in people’s minds. SlickDeals and FatWallet would buzz with excitement when such a find was discovered, and people would flock to the store….and pick up some other item of questionable necessity while they were there. this last item kept them afloat, even when their normal prices couldn’t even beat non-specialty stores like WalMart or Target. since they stopped offering any staggering deals on things, people stopped paying attention to them. If I can find something for 15% off in a Circuit City store, I know I can find the exact same thing online for 20% or more with relatively little effort, and then I can spice it up by not paying sales tax or shipping. And that’s what they needed to beat.

    Circuit City became non-competitive, and even their death rattles tell that story.

  8. Dean Says:

    I came. I saw. I left empty handed.
    It simply boggles my mind why they’re closing shop.

  9. lacrosseboy Says:

    Wait until the end and go to the store and see what no one wants, it’s more fun!

  10. Dauric Says:

    I looked the day after their announcement came out, I’ve been looking at getting a micro-laptop for a while and figured I’d have a look-see and CC’s liquidation.

    Shortly after I had to go to the nearby Best Buy just to check on something: Even with the liquidation ‘Discount’, Best Buy was still $50 cheaper, and for better hardware.

  11. Cynagen Says:

    Circuit City was overpriced to begin with, here they are, knowing their balls are in the proverbial grinder, and they’re still trying to milk the customer of more money than the customer should have to spend for the same item around the corner and down the street at big blue. I’m far from surprised that CC is bombing, there were only 3 here in the valley, and even on Black Fridays they were pretty much empty because the “deals” were jokes. Now, to respond to those who said “it’s no wonder traditional brick & mortar stores are going under if customers just go in to check merchandise and go home to shop online,” maybe we wouldn’t shop online if they were price gouging. CC has had that nasty habit for a long long time, and it’s not helping them now either. CC had no problem keeping the lights on and people on staff at their stores with the measly amount of transactions occurring because they were gouging, and making lots and lots of money on little overhead. You need to realize, that most of these tech businesses, get products at, sometimes, 60 percent cheaper than MSRP on the bigger things, up to 400 percent cheaper on smaller items. I worked briefly in a tech business that was a specialty market, and our items, while there was competition out there, about 4 other companies, big named ones too like HP, and IBM, we had markup of about 400 percent on cost. A product that cost us $100 new to stock, we sold for $400+. Sadly, that’s cheaper than the big name competition, but it kept us very much afloat. Now had CC not started up “firedog” the knockoff “geek squad”, which are both horrible tech support companies (Google: “Geek Squad ExposĂ©” find out why), and not hiring those extra idiots, they could have put that payroll towards “lowering” prices on products and becoming competitive again. They figured they could continue to price gouge in the age of online purchasing becoming the dominant market force. Sometimes I see stuff on STEEP discount at big blue, lower than or price close/matched to my favorite online shops, then I’ll buy from blue, simply because I have the product same day, and if I need to, easy returns. CC didn’t want to recognize the internet as a direct threat to their sales, and it hurt them, badly, that’s their own fault. Big blue is doing something right because they’re still in operation, and no “clearance” sales to speak of.

  12. Auto Glass Repair Says:

    I did not find any deals at the city, same usual junk as always 🙁

  13. Steve Kleine Says:

    Many years ago when I was in college I worked for an independent sporting goods store. It went out of business due to competition from the chains and a new lease that was 4 times the old one.

    They brought in a liquidation company that did the same thing Circuit City is doing now…taking prices up to suggested retail and only offering small discounts. Those discounts took the price down to a level ABOVE what they had been selling for before the liquidation. But my mind was boggled at how many people showed up the first day and went home happy thinking they got a bargain. Sales that day were so high it covered all of the liquidators fees.

    It was not until two months later that the real bargains showed up.

    It is an old trick that obviously still works today. Buyer beware!


  14. Minz Says:

    Yup.. price is too high… it was waste of car gas going there… they still try to rip you off at their final breath.. tsk tsk..

  15. Kris Says:

    I am in the same thought process as all of you. I worked for Best Buy as a “tech” before and after it became “GeekSquad”. I knew a local CC manager for years and suggested in-store service, then 2 years later they had it. The cost of product is just what another said, 25 to 400% above what they paid. I went in the store to see the so-called deals and have gone in every couple days to talk and see what has sold since then. It is amazing what people bought at the inflated prices! I looked at a Canon 40D w/ lense, $1299 their price and on-line I can get it at $699! On Friday, this same camera is down to $909, still $200 more. Costco sells this camera with two lenses, a tripod and case for $1149, granted you pay a membership fee, but you get much more for the price.
    I have been waiting for this day for some years ans CC deserves to go the way of the Dodo. I have benn going to CC lately to dicourage people from paying full price for their 20% off items. I hear atouney generals from some states are looking into the marking-up before the sale. In my state, marking-up a price and then having it on sale is illeagle. If you leave the tag on with a lower price, they MUST give you that price plus the advertised discount.

  16. alan goldberg Says:

    The Story re-inforced what I have been telling my “intelligent” friends. You are getting screwed for the final time by(not really)Circuit City. And I ask why we are continuing to get shafted by big corporations in the USA. Banks, Wall Street, and I guess everyone wants a piece of the consumers money! Old, basic, but real…”Let the buyer beware” or ” a sucker is born every day”.

  17. Dan Says:

    There is only one reason that I will buy something from a brick and mortar store: it is a product where the possible return or service fee is lower than online. Since I cannot return the product to CC, nor can I get after sales services, I have no motivation to pay extra to get something at CC. Once the price is at or near online I may buy something from CC. I’ve been there 3 times since they started their liquidation, and it was a joke, most people just milled around but didn’t buy anything except DVDs.

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