October 14, 2009

Why did Circuit City declare bankruptcy just before the heaviest retail sales month?

October 14th 2009 Posted to Shopping
retail sales
pencil asked:


This amazes me. You’d think they would have waited till January, no? Does the November notice cause you alarm about the state of the economy?

Ryan
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Comments

  1. Mister R
    October 14th, 2009 | 11:13 pm

    Maybe the creditors want to liquidate the inventory as fast as possible so the debt will not be an issue in the up coming fiscal year report?

  2. Alec
    October 18th, 2009 | 10:24 am

    They had already “passed the point of no return”! If you are consistantly sustaining losses, hanging on for the one “big season” is not enough! Major changes would already have had to have been made to make that “big” month profitable. In all probability an additional loss would have been incurred. The company has a legal responsibility to it’s stockholders to midigate it’s losses. Management feared the loss of their parachutes!!!!

  3. SterlingTopaz
    October 20th, 2009 | 8:25 am

    My sentiments exactly!

    I don’t agree with Alec

    The company will not do as well this month now that everyone knows they are going under they will be less likely to purchase there, after all, what if something needs to be returned, let alone no one buying gift cards anymore.

    So due to the announcement, they will do MUCH less sales.