CC declares bankruptcy

So be on the lookout guys for some really good deals on movies and/or video or audio equipment. And if you have any gift cards that you recently picked up from them use it quick since they may become worthless in a few days or weeks.

And CC means Circuit City for those that were wondering.

Here's the full list of companies declaring bankruptcy today:

hollywood video
Levitz
Sharper Image
Performance Team Freight
Linens n Things (my wife will be sooo happy to clean them out)
Circuit City
Wickes Furniture


Should be quite a few clearance deals available for a wide variety of products in the weeks and months to come. Maybe some blu-ray players will finally become affordable?

It depends on the type of Bankruptcy that's been declared. If it's chapter 11 the company will stay in business as it attempts to restructure and right the ship. This happened to Marvel Comics (now Marvel Entertainment) a few years ago. So you may not be seeing clearance sales just yet.

Link to info please?

Bummer. But not surprised one bit considering that it resides in a bankrupt nation.

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Link to info please?

Ditto. I hit the major financial/business sites before we went to lunch...CNNFN, CNet, MSNBC, MSN...nada. Nothing on other message boards where this would be huge news.

Jason, skeptic

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Ditto. I hit the major financial/business sites before we went to lunch...CNNFN, CNet, MSNBC, MSN...nada. Nothing on other message boards where this would be huge news.

I did the same thing, Jason -- even did the good old Google search and only came up with "rumor" message boards. It's starting to look like someone is crying wolf.

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Link to info please?

Sorry guys. No link. Got a forwarded email about it today from my wife who knows people who work in retail for these companies. Don't really care if anyone thinks its true or not. Just getting out the information. I guess we'll find out shortly whether its true or not won't we?

Hmmm... might be a good time to play a few options. Even silly rumors can make a person a good return in a few days, and if true I could stand to make much more.

This is complete bullshit. When it actually happens, then you post the thread.

"LIES! . . . ALL LIES!!!

Whether its true or not - there's no denying they're not in great shape.

http://seekingalpha.com/article/72314-the-vultures-swoop-in-on-circuit-city

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Whether its true or not - there's no denying they're not in great shape.

Granted and understood. Which makes the Blockbuster buyout all the more perplexing. If CC was going into bankruptcy and Blockbuster wanted to buy them, why not sell, recoup all the money they can (for the investors, of course ) and be done with it? They simply can't compete with BB with their huge mall leases. They continue to get rid of high paying employees for lower ones. They never have product on the shelf when they should. The stores are a mess.

Jason, anti-CC

And lets not forget they do not honor their advertised sales either. I remember the buy 2 get one free hd dvd sale that nowhere said only the movies in the picture but limited it to that any way at some store but not others. So after I tossed my movies on the floor that were not on sale I went to best buy who honored the CC sale.

I don't think Blockbuster is doing all that well either. It surprises me that Wal-Mart isn't interested in buying Circuit City. Even though some people hate Wally world, the store has the power of low prices. They should consider buying CC.

"The power of low prices?" Yeah ok.

Their is actually a VERY HIGH price that we are paying for that"POWER". And that price, is the loss of middle income jobs here in the good o'l u.s.of a.

Jason... very good commentary and perception about CC and Blockbuster's interest. I haven't said anything yet about this myself, as like you, I'm trying to figure out their financial angle (for increased profitability), as Blockbuster would increase their debt load substantially.

One possible angle... perhaps Blockbuster will do to CC what K-Mart did to many of the Sears stores after acquisition - close them down and sell the valuable property! Many CC locations have longed been on company-owned land, and Blockbuster may wish to sell both the building and/or property, and keep only the top-performing stores open and then combined them with Blockbuster rental product services. Certainly a possibility.

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-JIMI McLovin (the Voodoo Child)

Hendrix, or CC will go the way CompUSA did, similar to what you just said, leaving just the top performers around (we do have a 'new' CompUSA store, just behind were the 'old' used to be).

It is also right that Wal-mart could invest in CC and create an actually reliable front runner for BB (which, by the way, is adding yet a third store here on the place were I lived, they just opened one a couple of weeks ago, and this new one is opening very soon).

Yesterday I went to CC, and oh my, does it suck. There were no salesmen near the movie section (which is besides the gaming), I waited for a guy to ask him for a CD, which he swore was in the 'new releases' wall, but it wasn't, since I had been looking for it for the last 15 min... ...finally he decided to go to the 'back' and got it for me...I acted quickly and asked him if he could charge me, or else, I would've spent more time looking for yet another salesguy, which by the way, most of them are younger than me, and I am 23...

Oh, and once again, no Wiis on BB...

Latest Blockbuster analysis... (May 8)

> Bullish on Blockbuster...

Heading into Blockbuster Inc.’s earnings call May 15, an analyst with Utendahl Capital Partners said the No. 1 DVD rental company expects to report net income of $30 million and earnings (before interest, taxes, depreciation and amortization) of $110 million.

Analyst Alden Mahabir, in a research note, said he was “encouraged” by the projection since he said it showed the operational strategy implemented by CEO Jim Keyes “seems to be working.”

Mahabir said his kudos did not apply to Blockbuster’s announced attempt to acquire Circuit City Stores Inc.

Dallas-based Blockbuster had net income of $40 million in the fourth quarter — a result that left CNBC market analyst Jim Cramer declaring that “Blockbuster is Back.”

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-JIMI McLovin (the Voodoo Child)

They're back and yet, they closed the store that was nearest to me...go figure that one out.

mvckalel... if you had been keeping up with the new CEO of Blockbuster the past few quarters, he has led the company to close some unprofitable stores (including those that were also quite old and no longer in prime locations), and promote the online rental business more, as there's less labor costs in online operations than the B&M stores (labor, rent, utilities, maintenance etc). Look for other major companies with many retail stores (Starbucks?) to also close locations that are unprofitable, or produce less profits than desired, now that we are in a softer economy. Also more bankruptcies.

** BREAKING NEWS **

> Major Blockbuster stockholder CARL ICAHN may buy Circuit City - announced this morning...

Richmond, Va. — Under pressure from majority shareholders, Circuit City has agreed to open its books to would-be buyers Blockbuster and, possibly, Carl Icahn, and has added Mark Wattles’ three board nominees to it own directors’ slate.

Circuit City had previously resisted Blockbuster’s $1 billion-plus buyout offer, citing its questionable financing. But in a statement released this morning, the CE chain said it had received a letter from Icahn, the billionaire investor and Blockbuster director, indicating that he would be willing to buy Circuit City if the video rental chain is unable to.

Separately, Circuit City said it has accepted Wattles’ three board nominees to avoid a proxy fight. At least two current directors will either resign or decline to stand for re-election.

So Circuit City is now feeling the pressure. I still don't know if it would be a good move for Blockbuster to buy CC (and increase their debt lload). It's best to let Icahn, who's very wealthy, personally arrange the financing and take controlling interest. (my opinion)

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-JIMI McLovin (the Voodoo Child)

To piggyback on what Mr. Hendrix said, Blockbuster is trying to reinvent itself as a one-stop entertainment convenience store, similar to what James Keyes (IIRC) did with 7-11. They're bringing in more sell through material, more concessions and whatnot.

I've never been sure as to why Blockbuster wants CC. Unless, like has been speculated here before, it is to close a majority of stores, sell the property and use the name to combine the sell-through market with rental. I don't remember where I heard this, but I seem to remember one of CC's problems is their mall front locations. As in, the leases on the stores residing in a mall as opposed to BB who is generally a standalone place.

But, can a combo deal of CC/Blockbuster compete with the Wal Mart's, Best Buy's or internet's of the world? Sell through discs are always more expensive at those two stores than anywhere else. It goes for food, too. 97 cent Raisinettes as opposed to $1.50 candy? Um...no.

Jason, not a finance major

Hendrix, there is no reason for me to be keeping up with Blockbuster's CEO...

OK myckalel... I was just making a simple comment based on your statement - "They're back and yet, they closed the store that was nearest to me...go figure that one out."

Well, I'm helping you to "figure it out" (hehe).

Forget about the CEO for a moment... Blockbuster (the company) is streamlining their operations - and it's working - as the recent financial report indicates. They are #1 overall in rentals (online and store rentals combined), but still significantly TRAIL Netflix in online customers (w/Netflix having twice as many customers, I think, 7 million to 3.25 million). But Blockbuster has started 'turning the corner', and is moving to more profitability, and part of the key is closing some of the stores (and saving expenses) that are unprofitable.

Look at one of their competitors - MOVIE GALLERY/HOLLYWOOD VIDEO - having now gone thru two bankruptcy reorginizations, closing hundreds of locations (for both chains), also recently closing and now trying to sell the Movie Beam rental service for $1 million (despite having spent $10 million a year ago to buy it!!)... and STILL the company is losing money fast, major red ink, and may go out of business SOON.

I like keeping up with the news (The Wall Street Journal is my fav), and so the above ^ is my way of publicizing the current financial reports.

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-JIMI McLovin (the Voodoo Child)

LH, do you think the 'going to Blockbuster or Hollywood Video for renting DVDs' will be dead pretty soon?

I mean, around were I live (south Texas), there's a lot of piracy, so it could be a factor, but I don't think the same thing applies to the rest of the country. It has actually been a while since I visited Blockbuster (maybe more than two years I think)...and yet I've had the thought since a couple of months ago to begin a Netflix subscription, so that I can actually have a 'queu' and have all those good movies that all of you always talk about...

mvakalel... to be brief, both Netflix and Blockbuster provide excellent service with their online rentals, and as I've said previously, I lean toward Blockbuster because of free in-store rentals when I return my online discs -there- (instead of mailing them back). And now the local stores have Blu-ray titles in stock, so I get some free hi-def rentals.

As for the 'rental store' concept itself, most of the mom and pops are long gone, although some large single location, specialty stores still remain (in both large cities, and some regional areas, where there is no Blockbuster to rent from). Yes, some of the Blockbusters themselves are losing business in-store, and that's why the company is closing those that are unprofitable (saves much revenue), and suggesting customers migrate to the online service.

And both Netflix and Blockbuster will increase their 'download/streaming' usage by customers in the coming years (each has a streaming service), for those wanting this option - however, image quality is nowhere near like HD, nor even DVD.

Sorry, I don't keep up on piracy much, but I know it's a problem for Hollywood, and is getting worse. Hollywood studios are now adding that 'Digital Copy' to their new releases, in an effort to entice some away from the temptation to illegally copy discs.

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-JIMI McLovin (the Voodoo Child)