Circuit City, the struggling Big Box electronics retailer, announced earlier this week that it will be closing some 20% of its North American stores in an effort to regain profitability. It will shutter 155 of its 700 stores and lay off about 17% of its workforce.
But wait! If it's closing stores, doesn't that mean great bargain hunting? Not at all. The Consumerist lays out the ugly truth about liquidation sales -- that contrary to public perception, there are generally few real deals to be had at such events.
What typically happens when a store goes into liquidation is that a third-party is hired to organize the actual sale. Think of a liquidation company as a junkyard dog; mean, ugly, and not inclined to give *anyone* a deal.
Valuable inventory will be moved to other stores. Remaining inventory won't be subject to discounts, nor necessarily priced cheaper than what a watchful consumer could find elsewhere. What inventory there is will be marked down 5 to 10% every week until some sucker, er, some consumer, decides to take it off their hands.
I suppose Circuit City has fans. I've never met any of them, myself. And in fact the handful of times I've even ventured into the Big Box store that sprang up last year in my neighborhood, I had to search the empty aisles for employees to help me. When I found one, it was only to verify that no, in fact, they did not carry the common item I was looking for.
The store committed PR suicide when in March 2007 it fired some 3700 "overpaid" senior workers and replaced them with cheaper hires. Since then it's been in a death spiral, and the sudden screeching halt of consumer spending has dealt it its mortal blow.
I say good riddance. Maybe the freelance copper and wood scrappers can help the company break down its stores. They work for cheap!
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