Circuit City Closing, Who's Next?
Yesterday came the announcement that surprised few: after being unable to find a buyer, Circuit City asked a bankruptcy judge to allow them to close their remaining 567 stores. They had already closed 155 stores in the past 2 months while attempting to find a buyer. Below is a partial list of stores that are closing or in the process of closing (thanks to Terri Potratz here at Now Public for the list):
- Ann Taylor (117)
- Movie Gallery (378)
- Sprint/Nextel (125)
- Ethan Allen (12)
- Dell (140)
- Friedmans (120)
- Pier 1 (25)
- Sigrid Olsen (54)
- Talbots Kids/Mens (78)
- Home Depot (15)
- Eddie Bauer (29)
- GAP (85)
- Footlocker (140)
- Bombay (all 384 stores)
- Disney (98)
- Macy's (11)
- Sharper Image (184)
- Wilson Leather (160)
- Pep Boys (31)
- Pacific Sunwear / PacSun (154 Demo stores)
- Zales (105)
- Cache (20)
- Lane Bryant (40)
- KB Toys (356)
- Dillards (26)
- Fashion Bug (100)
- CompUSA (all stores)
- Linens 'N Things (all 371 stores)
- Mervyn's (all 149 stores)
- Club Libby Lu (Saks owned) (all 78 stores)
- Steve & Barry's (all 173 stores)
- Sergio Rossi (all standalone US stores)
- Office Depot (126 stores)
- Rite Aid (181 stores)
Many other companies like Lowe's, JC Penney and WalMart had already announced plans to scale back plans for expansion. There are some pros and cons to these closings:
- Great bargains to be had for consumers as retailers are trying to liquidate and others are trying to compete.
- A "thinning of the herd" so to speak, as the strongest retailers survive and the weakest go under. It could be argued that there are too many retailers out there now. Find a corner where there isn't a Starbucks, strip mall or a big box store.
- A return to superior customer service as the retailers that remain realize that they must woo their customers in order to keep them (ok, maybe this is wishful thinking...)
- Many retail employees are being laid-off, which not only gives them less money to spend, it shrinks the number of available jobs.
- Once the retailers close, there will be less competition, which could lead to higher prices.
- Because of all the bargains to be had, customers will be less likely to pay full price, instead opting to wait for extreme deals, further squeezing retailers' profits and increasing the likelihood that some retailers could go under. This was evidenced during the last Christmas season, where many waited until bargains were at absolute rock-bottom prices before splurging.
For me, personally, I only buy when I need stuff anyway, so there is little effect on me. I am curious though, what effect these closings will have on other buyers.