Sony Halts Shipments to Circuit City

[Shawn Zipay]

It's being reported today that shipments of Sony goods, en route to Circuit City retailers across North America, were stopped mid-transit and told to return to Sony.

The shipments were halted after "worries that Circuit City couldn't pay for the shipments." This effectively means that all Sony products at Circuit City will not be replenished until they can "convince Sony that their credit line is reliable."

This news comes on the same day that Circuit City was issued a de-listing notice from the New York Stock Exchange. The company has had an average closing stock price of below $1 for the past 30 days.

Earlier this year Blockbuster passed on acquiring Circuit City. This then lead to much speculating on the when, not if, Circuit City would go bankrupt.

Source

[megawhompertoo]

Re: Sony Halts Shipments to Circuit City

Wow, that's going to mean hundreds of thousand of entry-to-decent paying jobs gone. Odd; they had a decent year last year from what I remember--it's possible their recent round of expansions came at a bad time for a store looking to sell giant televisions to folks looking for a way to stay in their homes.

[TheEn|gma]

Re: Sony Halts Shipments to Circuit City

So one of the first falls.

[Polka]

Re: Sony Halts Shipments to Circuit City

This sounds like a job for...AAK.

[Warhawk]

Re: Sony Halts Shipments to Circuit City

well, I guess its time for me to start looking for a new job

[AllFoamNoBeer]

Re: Sony Halts Shipments to Circuit City

It's odd how the consumer market is falling.

[Trooper_811]

Re: Sony Halts Shipments to Circuit City

You can only sell overpriced products during an economic boom. Things tend to fall apart in a recession.

[Guest]

Re: Sony Halts Shipments to Circuit City

Well, time to get a new job. Damn it.

[{HHx}b14ze]

Re: Sony Halts Shipments to Circuit City

IMO, they are overpriced.

[Warhawk]

Re: Sony Halts Shipments to Circuit City

IMO, they are overpriced.

all retailers tend to be overpriced. The convenience of local pickup and associates to explain everything to customers does not come for free :p Circuit City, Best buy, etc.... are all meant for people that are pretty much clueless in the electronics industry. Not 'Do it Yourselfers' like most people on this forum.

[[MyIS]Airborne]

Re: Sony Halts Shipments to Circuit City

Circuit City closing 155 stores

RICHMOND, Va. – Circuit City Stores Inc. said Monday it is closing about 20 percent of its U.S. stores — cutting thousands of jobs — in an effort to return the nation's No. 2 consumer electronics retailer to profitability.

The Richmond, Va.-based company said it will shutter 155 of its more than 700 stores in 55 markets, including Phoenix and Atlanta, by Dec. 31. Circuit City also said it will further reduce new store openings and plans to work with landlords to renegotiate leases, lower rent or terminate agreements.

The company said it expects the stores it is shuttering, which generated about $1.4 billion in net sales in fiscal 2008, will not open on Tuesday and store closing sales will begin on Wednesday.

The move comes as Circuit City heads into a crucial holiday shopping season that could determine its future, amid a slowdown in consumer spending that has even the least vulnerable retailers worried.

"The weakened environment has resulted in a slowdown of consumer spending, further impacting our business as well as the business of our vendors," James A. Marcum, vice chairman and acting president and chief executive officer said in a statement. "The combination of these trends has strained severely our working capital and liquidity."

Marcum called the decision to close stores "difficult, but necessary."

Its shares rose 6 cents, or about 23 percent to 32 cents in early trading Monday.

Circuit City also provided updates on other aspects of its business, including restrictive actions taken by vendors, including limiting credit for purchases. But the company said while it is working to secure support from vendors, the "current mix of terms and credit availability is becoming unmanageable for the company."

It also said it has been unable to collect an income tax refund of about $80 million that Circuit City believes it is owed from the federal government.

The company has had only one profitable quarter in the past year, posting a wider second-quarter loss in September with a 13 percent decline in sales at stores open at least a year. Its results have weakened as the company faces significant declines in traffic, heightened competition from rival Best Buy Co. and others and a weakened brand position.

Circuit City, which is reviewing its operations while exploring strategic alternatives, has been working with advisers to determine how to substantially improve its operating and financial performance.

The company said last week that the New York Stock Exchange has warned it that its stock price is not high enough for continued listing.

The NYSE said Circuit City shares had an average closing price of less than $1 over 30 consecutive trading days as of Oct. 22, falling short of the exchange's requirement. Its shares have closed under a dollar in trading since Sept. 30, when they closed at 76 cents. Shares have traded between 17 cents and $8.24 in the last year.

In order to regain compliance with the NYSE, Circuit City's common stock share price and the average share price over a consecutive 30-trading-day period must both exceed $1 within six months following receipt of the notice.

A major Circuit City shareholder — Classic Fund Management AG, a Liechtenstein-based asset management company — also said in a regulatory filing last week that it cut its holdings to 8.2 million shares, or about 4.8 percent, from 9.5 million shares, or 5.6 percent. It did not disclose a reason for the change.

Circuit City has been under new leadership since late September when Chief Executive Philip J. Schoonover agreed to step down. He was replaced by Marcum, who was tapped to oversee Circuit City's multiyear turnaround efforts.

http://news.yahoo.com/s/ap/20081103/ap_on_bi_ge/circuit_city_store_closings

[Shawn Zipay]

Re: Sony Halts Shipments to Circuit City

Airborne beat me to the punch on this. Was going to get this up yesterday and completely forgot.

There's some more information here: http://consumerist.com/5074161/updat...ing-155-stores

Such as:

UPDATE 4: In classy fashion, Chicago CC employees were told the news at what was billed as a "holiday kickoff" meeting that instead became a "holiday layoff" meeting.

UPDATE 5: Another CC insider reports, "Liquidators will be coming in on Tuesday and the affected stores will be shut down. there is likely not going to be a severance package for us being affected by the layoffs but we were given the option to get a bonus based on how many hours we worked under the liquidation process. We are not allowed to transfer to other locations and have to wait out the liquidation process before we can reapply. So essentially, we will have to take a paycut, a position cut, and more than likely an hours cut if we want to still work for the company.

More importantly I tried to find out what was going to happen to all the warranty computers. Customers will be getting a call from their local firedog techs tomorrow (Monday) about either to pick up their computers and take them to a different location to do warranty work, or for those who have already had their computers sent out for repair be told where they can pick it up. As far as I've been told everything that is out at our repair depots has already been set in motion and will not be shipping back to the stores that are closing. During the liquidation process we will no longer be accepting gift cards, coupons, checks, or circuit city credit cards.

I would tell people to call up their store tomorrow and see where their laptop is being shipped to because obviously that could be a very big hassle for people."

[imported_DANK]

Re: Sony Halts Shipments to Circuit City

They just allowed Circuit City to put a new store in our Southern California area. I told these foolish developers to not allow Circuit City to be allowed to build there and submit in the contract.

Damn was I ever right, everytime I drive past the store the parking lot is completely empty and so is the store. I predict this store will close in the next 2-3 years.
Retail is being hit hard.

[Obsidian Spire]

Re: Sony Halts Shipments to Circuit City

I wonder what is the next big chain to start dying?

[megawhompertoo]

Re: Sony Halts Shipments to Circuit City

I wonder what is the next big chain to start dying?

linens and...some...things