Circuit City about to short-circuit?

[marmar]

Circuit City to shutter 155 stores, renegotiate leases
Commentary: Move may help, but liquidity is the real concern
By MarketWatch


NEW YORK (MarketWatch) -- Circuit City is pruning its store base, closing 155 out of roughly 700 U.S. stores as it tries to reverse its sagging fortunes ahead of the critical holiday shopping season.

The stock was on fire Monday midday -- relatively speaking -- up more than 40%, or 11 cents, to 37 cents a share.

The troubled consumer-electronics retailer is also pursuing other restructuring actions: cutting 17% of jobs, reducing its store openings, renegotiating some leases, and evaluating options for dealing with its "deteriorating liquidity position."

The store closings are a good move, although maybe a bit late, but liquidity is the real concern.
Richmond, Va.-based Circuit City said issues such as "waning consumer confidence and a significantly weakened retail environment," have hurt the company's sales and profit margins.

Through the year, even the healthiest retailers face flush times and lean times, and many borrow money in order to keep shelves stocked, employees paid and doors open.

For struggling retailers, liquidity issues end up being a bit of a vicious cycle. It's harder to attract shoppers into stores, so sales and profits suffer, liquidity pressure intensifies and vendors don't want to extend credit, making them pay upfront for products. It's tougher for the company to have fresh merchandise on hand, so shoppers stop coming, sales worsen, and so on. ..........(more)

The complete piece is at: http://www.marketwatch.com/news/story/Circuit-Citys-biggest-problem-liquidity/story.aspx?guid=%7B9279618F%2D8051%2D457E%2DAF65%2DD9ECCFFC4034%7D

[rcrush]

1. I remember rumors of them merging with Blockbuster Video

Two shit companies join together to form a big pile of crap!

[TheCowsCameHome]

2. There's one under construction in the next town, however

work was halted last week.

Another big empty box store to look at, even before it had a chance to open.

Management in CC must be real idiots.

[Canuckistanian]

3. Sorry to hear about the employees, but good riddance

Their "business model" was a tribute to Republican ideology.

And Lord knows, there are other places to shop.

[redstateblues]

4. Best Buy has blown Circuit City out of the water

[marmar]

5. Because Circuit City was possibly the only store with worse customer service than Best Buy.....

n/t

[Blue_Tires]

6. a shame...i had great memories of that place when i was coming up

of course, that was back in the 80s

[wellst0nev0ter]

7. What? Replacing Knowledgeable Salespersons With Part-timers

In order to increase the bottom line isn't working out for them?

http://abcnews.go.com/GMA/story?id=2994476

Once again, I'm sorry about the workers, but good riddance to bad rubbish.

[sam sarrha]

8. they made the decision not to pay knowledgeable people a decent wage, and hire dummies who cant

help you for shit wages.. i couldn't get questions answered and never went back.. seems lots of other people did the same