Circuit City Files for Bankruptcy Protection
Today Circuit City filed for chapter 11 bankruptcy protection. Since being arrested last year in a Circuit City parking lot, a number of people have contacted me over the past twelve months asking for my thoughts on all things Circuit City. Not surprisingly, a few people emailed me today asking for my opinion on the bankruptcy news. A couple of the people who contacted me asked if I was happy to hear that Circuit City is going out of business.
First of all, Circuit City is not necessarily going out of business. Chapter 11 bankruptcy provides companies with legal protection against creditors while they reorganize. Many companies survive Chapter 11 bankruptcy and live to see more solvent days. If Circuit City were filing for a Chapter 7 bankruptcy, then their assets would be liquidated and the company would cease to operate. Since this is not the case, it is unfair to say that Circuit City is going out of business.
A better question is, am I happy to see that Circuit City is suffering financially? The answer is no.
I certainly have good reason to be unhappy with Circuit City. After all, they detained my family and me after I refused a bag search in their Brooklyn Heights, Ohio store. After the incident, rather than apologizing they tried to confuse the public about what happened by blurring their detention of my family with the largely unrelated driver’s license refusal between me and a police officer. Instead of changing their policies and educating their employees, I’m told that their anti-consumer practices are still in place.
Although I no longer shop at Circuit City, I can’t say that I’m happy to hear that they’re on the verge of collapse. Circuit City employs over 45,000 people, and their livelihoods are now at stake. With more than 650 stores in the United States, a number of real estate companies stand to lose a big tenant if Circuit City closes its doors for good. Despite my unpleasant history with this company, it would be petty and vindictive of me to celebrate the threat of so many jobs.
Instead of wishing for Circuit City to collapse, here’s what I would like to see happen:
- I hope that Circuit City is able to restore itself financially and emerge from Chapter 11 bankruptcy as a healthier company.
- I hope that Circuit City’s creditors get repaid in full.
- I hope that Circuit City is able to limit the number of stores it has to close and the number of employees it has to let go.
- I hope that Circuit City learns from its mistakes and adopts a friendlier approach with its customers. This would involve adopting loss prevention methods that don’t require their customers to endure bag searches. Not trusting your own cashiers at check-out is a poor reason to treat your customers like criminals.
- Although I’m not holding my breath, it would still be nice to receive a written apology from Circuit City. I think some companies either underestimate the power of an apology, or are afraid that issuing an apology exposes them to a lawsuit. In all honesty, if Circuit City apologized and pledged to change their loss prevention policies, I would consider becoming a customer with them again.
In their reorganization efforts, I wish Circuit City well. They’ve been around since 1949, and it would be a shame to see such an old company disappear. Hopefully this bankruptcy will give them a blank slate, and allow them to emerge as a more financially sound and customer-friendly company.
You’re right that Circuit City isn’t going out of business, this is a protective measure to prevent that from happening. This filing is more due to the credit crunch than anything–this is the time when retailers stock up big on inventory, but sales are typically slower while people wait for the holiday sales. Usually, banks and creditors are a little understanding with the credit extension to retailers, but not this year. This is a way to extend credit with Sony and HP, as well as renegotiate some lousy leases.
your friend Joe Atha presently is the Assistant store manager at the
Richmond Hts., Oh JCPENNEY store. 701 Richmond Rd
Richmond, OH 44143
Phone # 440-449-3800
Ever since I read the story of your illegal detention by Circuit City personnel and the police of Brooklyn, Ohio, I have wondered whether or not you’ve pursued your right to prefer charges for false imprisonment against the arresting officer and the two Circuit City employees. It seems to me that under Ohio law you have a solid case against all three people involved in illegally detaining you, as well as Circuit City as a corporation. Your business, I realize. I just hope that it works for you to be as aggressive in the defense of your civil rights as possible; I can see how it might not (threats against your family, etc. by local Neanderthals).
Here in Denver, Circuit City is holding a “going out of business” sale, so I guess it’s for real - unless this is simply a gimmick for CC to unload all their inventory which has gone obsolete in the past eighteen months. It’s amazing how many suck, er, customers will fall for “fantastic deals” on stuff that doesn’t work as well as brand new gear that’s cheaper.
I’ve been less than impressed by the value Circuit City offers its customers for years. It’s been five years since I’ve darkened their doors. I hope that their former employees find good jobs elsewhere, but frankly, Circuit City’s business practices betray a multi-layered case of incompetence. Under our free market system companies are just as free to fail dismally as to succeed. A lesson our nation’s banks ought to have learned.