Circuit City to close all 567 stores, layoff 30,000

[xwpopper]

Bankrupt electronics retailer Circuit City Inc. said Friday it has asked for court approval to close its remaining 567 U.S. stores and sell all its merchandise.The company said it has 30,000 employees.
"We are extremely disappointed by this outcome," James Marcum, acting CEO for Circuit City, said in a statement. "We were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company."

http://money.cnn.com/2009/01/16/news/com...cuit_city/


Weren't all those combined $1.5 trillion bailout packages that we have ALL paid for supposed to help companies like Circuit City get money through an "agreement with our creditors and lenders" to stay afloat? I thought all those trillions of dollars were to be used by banks to LOAN money to businesses so they could emerge from the recession. That's the second major national retailer (Linen's n Things) to close in 2 months because they couldn't get financing through banks who received some of the TRILLIONS approved by our government. Way to go Paulson!

[regic]

I thought all those trillions of dollars were to be used by banks to LOAN money to businesses so they could emerge from the recession.

The banks decided to use the trillions to maintain their high dividend payments to shareholders instead -two examples being Bank of America (BAC) and Citigroup © which both have dividend yields over 17%.

52% of bailout to banks being paid in dividends to shareholders
http://www.americablog.com/2008/10/52-of...id-in.html
Banks to Continue Paying Dividends
http://www.washingtonpost.com/wp-dyn/con...04533.html

[mandy]

Goody's Family Clothing also announced plans to liquidate this week: 282 stores and 8,200 employees. 

KBToys (356 stores), Mervyn's (149 stores), Bombay (384 stores), Linens 'N Things (371 stores), Whitehall Jewellers (373 stores), Shoe Pavilion (64 stores), and Steve & Barry's (173 stores) also plan to close ( or have closed) all their stores. 

Gottschalks filed Chapter 11 this week, and TheParent Co (etoys.com, babyuniverse.com) and Boscovs filed in December.

RiteAid and Borders are debt ridden and likely headed to Chapter 11.  RiteAid stock is now trading at 35 cents per share and Borders trades at 57 cents.  Duane Reade, Loehmann's, Bon Ton Stores, Claire's Stores (3,074 stores), Pier 1 Imports, and Finlay (Bailey Banks & Biddle jewelry stores) are also teetering on the brink.

edit: The Donald needs a bailout too.  Trump Casinos & Resorts will likely make its 3rd trip to bankruptcy court.

[xwpopper]

Wow, I forgot all about KBtoys. I loved that place! I guess I was thinking about places open around me that were closing, but I didn't have a clue about Goody's either.

So much for the big Bush bailout helping thousands of businesses get loans, huh? The bank directors and boards apparently want keep their stock price high by giving unrealistic dividends, just so they can sell their own stock options at a good price.

The reality is that this is a free commerce market, and it is working. The strong do survive. It is capitalism. But when our government takes trillions of dollars to stop the capitalist cycle, gives it to banks to loan to troubled businesses, and this happens to a major retailer like Circuit City, Goody's, KB, LinensNThings, etc, because they couldn't get financing, it obviously isn't working like it was planned and every American should be royally pissed. We are paying for the bank CEO's to keep their stock option prices up through dividends, and we will also be paying for financial aid to the hundreds of thousands who lose their jobs because of the bank's greed. We have a new President that is very intelligent and has a staff that knows their way around the BS, and hopefully can correct the lack-of-a-clue attitude of the Bush and Paulson blunder.

[sneakymagenta]

Ghost Malls Will Be Appearing
http://www.thecuttingedgenews.com/index....ticle=1050&pageid=37&pagename=Page+One

[xwpopper]

[quote author=sneakymagenta link=topic=18879.msg73842#msg73842 date=1232391524]
Ghost Malls Will Be Appearing
http://www.thecuttingedgenews.com/index.php?article=1050&pageid=37&pagename=Page+One
[/quote]

Appearing? How about growing?

http://www.deadmalls.com/features.html

The smallest state in the country, Rhode Island has 5 defunct malls, the second smallest, Connecticut, has 7 abandoned malls. These are just the ones standing empty! That's not counting the ones that have been leveled for re-development.

It's going to be a bad, bad couple of years for many company selling non-necessities. Better get into food (Costco/Sam's sound good) auto parts (no one can afford a new car), pharmacies (to dull the madness) or liquor... to drink it all away.