Short circuit: Don't expect great deals at Circuit City's liquidation sale
Filed under: Shopping, Technology, Recession, Bankruptcy
Circuit City, the struggling Big Box electronics retailer, announced earlier this week that it will be closing some 20% of its North American stores in an effort to regain profitability. It will shutter 155 of its 700 stores and lay off about 17% of its workforce. But wait! If it's closing stores, doesn't that mean great bargain hunting? Not at all. The Consumerist lays out the ugly truth about liquidation sales -- that contrary to public perception, there are generally few real deals to be had at such events.
What typically happens when a store goes into liquidation is that a third-party is hired to organize the actual sale. Think of a liquidation company as a junkyard dog; mean, ugly, and not inclined to give *anyone* a deal.
Valuable inventory will be moved to other stores. Remaining inventory won't be subject to discounts, nor necessarily priced cheaper than what a watchful consumer could find elsewhere. What inventory there is will be marked down 5 to 10% every week until some sucker, er, some consumer, decides to take it off their hands.
I suppose Circuit City has fans. I've never met any of them, myself. And in fact the handful of times I've even ventured into the Big Box store that sprang up last year in my neighborhood, I had to search the empty aisles for employees to help me. When I found one, it was only to verify that no, in fact, they did not carry the common item I was looking for.
The store committed PR suicide when in March 2007 it fired some 3700 "overpaid" senior workers and replaced them with cheaper hires. Since then it's been in a death spiral, and the sudden screeching halt of consumer spending has dealt it its mortal blow.
I say good riddance. Maybe the freelance copper and wood scrappers can help the company break down its stores. They work for cheap!
Money Clips
- HILARIOUS: Warren Buffet Plays Axl Rose in New Commercial - Huffington Post
- ON THE PLUS SIDE: Where Home Prices Are Rising - CNNMoney
- FRICTION: Could China Trade War Put Walmart Out of Business? - 24/7 Wall St.
- PROFILE: Opinionated Auto Industry Insider Dies - FORTUNE
- DON'T LAUGH: More Homeowners Turning to Fake Grass - SmartMoney
- HIT HARDEST: States Hurt Most From Rising Gas Prices - CNBC
- GET YOUR MONEY'S WORTH: Best Cars to Buy Used - CBS MoneyWatch
Reader Comments (Page 1 of 1)
11-05-2008 @ 5:09PM
Jason said...
"I suppose Circuit City has fans. I've never met any of them, myself. And in fact the handful of times I've even ventured into the Big Box store that sprang up last year in my neighborhood, I had to search the empty aisles for employees to help me. When I found one, it was only to verify that no, in fact, they did not carry the common item I was looking for. " I'm not a fan of the company but the one I go to has always been very helpful and usually had what I was looking for.
I've made four major electronics purchases in the past year and have had the problems you described above at my local Best Buy. Three of those purchases I ended up at Circuit City for since Best Buy was "Sold out" every time I went up there. Circuit City always honored the competitors pricing as well.
The worst of the four purchases was when Best Buy sent me 80 miles away to purchase a Dell XPS that was on sale. When I got to the other location they informed me that the store that sent me was supposed to sell me the display unit at a discounted price since there was a new model coming out
(The sale was for the local stores only). Fortunately the people there were really nice and honored the price from the store that sent me.
The store closures are due to poor executive decisions and an even poorer state of economy. I wish the workers of the closing stores good luck (Even the crappy ones) ;-).
Reply
11-05-2008 @ 5:25PM
j said...
It's funny about 10 yrs ago Circuit City started a little company called CarMax. They spun the company off a few years later because it was bringing the stock price down for Circuit City. Now they probably wished that they hadn't (maybe they should call for a loan).
Reply
11-18-2008 @ 7:21PM
RDF said...
Two weeks ago I was in the local Linens and Things store. They had just announced the were closing all of their stores. Several of the store employees were removing some of the quality cooking gadgets and replacing the good stuff with with items that would make a dollar store worker embarrassed. The message is 'buyer beware', It is very rare that you find a bargain at a closeout sale.
Reply
1-27-2009 @ 12:04AM
A said...
Of course you aren't going to get good sales a week after the liquidation is announced. They aren't going to price everything at 75% off. Oh... and if you had gone in before the liquidation, you would've saved over 300 bucks on that tv or computer...
Reply