Gift Card Alert: Circuit City filing for bankruptcy?
May 01, 2008 in Bankruptcy & Gift Cards, General |
Is Circuit City going out of business? Over the last week or so, there have been lots of questions regarding gift card redemption from Circuit City. The questions are based on rumors of the company being on the verge of bankruptcy.
Even though the company was on a recent list of retailers at risk of going under during the recession, i do not believe the company is going to file for bankruptcy soon unless the current offer from Blockbuster to buy Circuit City falls through. If the deal falls through, Circuit City will be under a lot of pressure to do something dramatic to turn itself around. In the absence of a plan, and if the company continues to burn cash, they will have no choice but to file for bankruptcy protection.
As I have recommended before, if you currently hold a Circuit City gift card, now is the time to use it or risk losing it should the company go under. I would also not recommend buying a Circuit City gift card until the dust clears.
Readers, what are your thoughts about Circuit City and rumors about the company? Post your comments in the comments section below.
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I don’t think was a issue a few years ago. It’s just that BK are really popular now. An interesting number would be to see how much money do these retailers hold are in gift cards? I’m also interested to see the numbers this year, how many $ were lost in BK related gift cards. With high gas prices and increased costs in consumer good, I don’t know what the future will hold.
There not going bankrupt. In order to go bankrupt you have to be in debt and no money. They have very tiny tiny debt with tons of cash in their bank account. Look it up, they have $50 million in long term debt with $400-500 million in cash and $1.1 in liquid assets. Plus there opening 70+ stores this year. What kind of bankrupt company does that?
anonymouse, i think the jury is still out on Circuit City. It appears Best Buy is executing better then Circuit, and the current recession is going to make their problems worse unless they come up with a better model. Laying off their highest paid workers and replacing them with inexperienced workers has not helped with customer service at their stores either. I agree with you that they have the capacity to hang around for a while but for how long if they don’t change direction?
Customer service is not a problem for Circuit City, they have always ranked higher than Best Buy and many other retailers in secret shopper surveys (try to get help returning a product at walmart with their mandatory 1 customer service associate). Their business model is no more flawed than any other electronic store. It is a tough business when new technology is considered old two weeks later. The media has blown everything out of proportion as they always do.
theIchItool, you make some good points. The electronics business is a tough market to be in. Now, i am wondering if combining Circuit City with Blockbuster will help the situation. It appears Blockbuster is trying to present the merger as a way to position the two companies for the future (where the digital world of entertainment is heading) but I am not sure if that is the solution. Any thoughts?
Circuit City is not filing for bankruptcy. I do some work with them and I know this is not the case. It is just a rumor.
I dont think they are going out of business right now but heck for blockbuster to only offer $1 billion to buy them, that should show something.
I just got off the phone with with their over seas phone agent and they advised that this is all an rumor floating around.
Though if they did layoff all those employee’s that is something that would sway my support!!!
Ash, Sean and AnonOmoose, thanks for stopping by.
[...] opening its books to Blockbuster and other investors interested in an acquisition. If you recall, i posted a story last week about rumors of the company being on the verge of bankruptcy, which turn out to be [...]
I actually work in the new store The City(3369) at San Patricio Plaza in Guaynabo city, Puerto Rico. I think the company is in Bankruptcy. In the last 3 weeks various experience and customer service partners have 7 to 10 hours schedule. Nobody lives with that shedule. Several supervisors and other personal was dismissed. In the store, merchandise are not received almost, and other bad operations things.
Luis, thanks for stopping by. Your insider account is definitely appreciated.
i work at circuit city and i do think they are going bankrupt.Stock in the store has dramatically decreased. sales have also decreased. stollen produtc is another big thing just in one store alone we are missing over 80,000 dollars starting from february. and thats just one store alone.so do the math. BANKRUPT!!!!!
Lol you people don’t know what attempting to force stock pricing down is do you? Circuit City is one of the least in Debt Electronic companies in the world.
First off, Filing for Bankruptcy is public knowledge, if this information were true there would be front page headlines in most states in the US. Hope some lawyer out there doesn’t get an itch and want to sue whoever decided to deface and post fraudulent information.
Everyone has opinions but if it costs shareholders some green then I expect the next Season of “24″ to be hell bent on cyber economic terrorism.
Nice read though.
lol
Circuit city employee & Insanity, thank you both for your comments.
I currently work at circuit city as a technician and they just cut our hours nationwide. Im not sure if we are going bankrupt or if our economy is going down cause I hardly see any tech jobs availiable in my area. Everything is just going and I blame increasing gas prices when we could solve the economy issue by actually touching our own oil reserves gas prices should surely jumped way down. but no we wont touch our oil reserves until we go into another depression. But yeah im pretty sure every buisness is going through the same phase not just electronic stores.
Pretty much all forms of a physical standalone video rental company will fall to the wayside to online rental Co’s. Blockbuster merging with CC gives blockbuster a chance to continue.
What most people don’t realize is that most of the cd’s that you see in stores now will more than likely not exist in that media format by the end of this year, or early next year. Digital downloads as a sole source of audio/video are on the horizen, don’t say i didn’t warn ya.
/good day sirs
Insanity, i agree. I think blockbuster sees the writing on the wall and is preparing for a time when DVD will not be the dominant format.
To the person who said that they won’t go bankrupt because they have money- that’s 110% incorrect. A company can still have money and not very much debt and still go bankrupt… You can go bankrupt and still have money. Look @ Wickes Furniture Stores!! You have to still have money at the end to keep the doors open to get rid of your assets and also give employees severence.
To the person who claimed that a customer representative told them that they’re not going bankrupt so it must be true is too naive. Not only would they be fired if they gave out confidential information, they wouldn’t even be given that confidential information in the first place in that type of position.