Circuit City Sales Plummet: Attorney
By Alan Wolf -- TWICE, 12/23/2008
Richmond, Va. — Sales at Circuit City have fallen between 43 percent and 50 percent since the chain filed for Chapter 11 protection on Nov. 10, an attorney for the company told a federal bankruptcy court here yesterday.
According to a report in the Richmond Times-Dispatch, the downturn was almost double the retailer’s projected sales decline of 28 percent. Circuit City built the forecast into its budget, the attorney said during a hearing, which is based on a $1.1 billion revolving credit line that the court approved yesterday.
In a written statement, Circuit City spokesman Bill Cimino told the newspaper that the weaker-than-expected results “should not be considered a negative,” given a deteriorating economic environment in which all retailers are struggling. He added that the company is improving its gross margin rate, which is helping it manage its budget and offset the sales decline.
But retail consultant and investment banker Howard Davidowitz told the newspaper that the terms of the loan and the “collapsing” of Circuit City’s customer base will make it nearly impossible for the company to survive.
Circuit City’s attorney said the chain is "building a bridge to somewhere" and remains focused on working its way out of bankruptcy, which could include a sale, the newspaper reported.
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"NewEgg.com", "TheNewCompUSA.com"..... Does anyone see a pattern here?! I'm thinking "TheNewCircuitCity.com" coming soon.... to a web browser near you! Pretty soon, the vendors will grow very tired of dealing with a single national, (and tyrannical) CE retailer (whose colors are Blue and Yellow). I can list many things that helped bring down Circuit City in the eyes of the consumers, but for the sake of competitive balance, I sure hoped that Circuit City could have survived. Clearly, that is not going to be the case in 2009, unless a miracle of all miracles happens soon.
Adam C - 2008-24-12 22:53:00 EST -
Sounds just like the lies Craig Boucher fed to the employees at Tweeter. If someone offers you a "guaranteed" payout if you stay to the end of a liquidation, demand that money upfront and see what they say. No one bought his BS then including myself. I seem to have developed a following judging from the 1st post. I'm flattered.
motion - 2008-24-12 11:16:00 EST -
"Building a bridge to somewhere" sounds suspiciously like liquidation to me. The company may emerge from Chapter 11 in June, and step into Chapter 7 immediately.
billddrummer - 2008-24-12 11:02:00 EST -
Pretty soon you will no longer be "Welcome to Circuit City, Where is Service is State of the Art!)I would say they will all be gone by June or July. That will leave Best Buy as the king of CE retailing as we know it!!! Long live Best Buy!!!!
I'm not motion - 2008-24-12 09:29:00 EST
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