Business Journal: Circuit City filing for bankruptcy retail pattern of instability - Circuit City, Retail-IT industry

Business Journal: Circuit City filing for bankruptcy retail pattern of instability - Circuit City

, Retail-IT industry

As Circuit City filed for bankruptcy and economic decline to the retail industry a greater pressure on Best Buy, Wal-Mart and other online retailers who want to increase their market share in electronic products.

Circuit City has to squeeze as many of its small size retailers. Now is the turn of its own to apply for bankruptcy.

Circuit City on Nov. 10 Monday said it will continue to operate, while temporary CEO JamesMarcum with FTI Consulting's restructuring expert close Cooperation To study the restructuring plan the next step. But analysts pointed out that the successful completion of the retail industry, Act 11 of the plan are very rare. Typically, consumers do not like from the bankrupt retailer that purchased cars and other gifts or to extend the guarantee period. Many retailers through restructuring, re-appeared on the market, and then returned to the court for bankruptcy, as examples of this abound. For example, Tweeter Act No. 11 last year, according to bankruptcy, and later re-opened, but now bankrupt again and intended to close remaining 94 stores.

In the last two years, Circuit City's market capitalization decreased by 50 million. As early as a few months ago, the industry filed for bankruptcy on the outgoing message it wants to. Its business gradually Wal-Mart and Best Buy and other discount retailers and online retailers such as Amazon and Buy.com are eroded. Blockbuster made in July to 10 billion offer to buy Circuit City, but eventually the two sides failed to reach agreement. In the radical under pressure from investors, Mark Wattles, CEO PhilipSchoonover forced to resign in September.

Wal-Mart over the past 5 years, increasing its consumer electronics retail industry's strength. Last year, its consumer electronics sales of 17 billion U.S. dollars the same period, Best Buy's consumer electronics product sales of 280 billion, while Circuit City's consumer electronics sales is only 11 billion U.S. dollars. As the role of low-cost strategy, Wal-Mart's market share rapidly. Wal-Mart on Blu-ray DV D players, including hundreds of products are carried out at a discount.

Best Buy for the good news in terms of

According to Credit Suisse analyst GaryBalter said that if Circuit City will eventually all of its more than 1,400 retail stores were closed, then (last week announced its intention to close 155 retail stores in the program), then would 10500000000 U.S. dollars worth of electronic products for persons, thrown into the market bid. Although Wal-Mart, Target and other online retailers are constantly improving their market share, but some of the retail industry professionals still think that the perfect professional electronics retail chain is of great value. They said Best Buy has begun to call on consumers to consider the recommendations and procurement experts recommend consumers to use their GeekSquad division provides installation and other services.

Best Buy Circuit City 85% of the market in the region have set up retail outlets, it has already done the snatch Circuit City's market preparation. Balter Monday in a note to investors that: "We believe Best Buy will win the majority share of Circuit City. This is the main advantage of Best Buy."

Recently, Best Buy in order to attract female consumers store personal Shopping guide service launched, this approach makes the Best Buy retail stand out immediately.

Pali Capital's managing director StaceyWidlitz said: "You can not get in the Wal-Mart, Best Buy, like shopping guide service that provides a similar service."

The news for the consumer electronics vendors, it is not good news. HP. Samsung and Sony are Circuit City's largest unsecured creditors. Retail consultant and investment banking HowardDavidowitz founder of Davidowitz & Associates, said: "As the customer relationship, these companies have already reduced the co-operation deal with the major retailers. For suppliers, this is not good news."

Christmas plans This is not news, but the acquisition has been made in this area dramatically reduces the number of retailers, the focus of the balance began to shift from the manufacturer to the retailer. (Some companies, such as Apple Has chosen the direction of the retailer. ) According to the Consumer Electronics Association's economist ShawnDuBravac said last year the world's top five consumer electronics retailers and achieved market share of 55%, and this data 10 years ago only 42%.

Circuit City bankruptcy aggravated shrouded in the haze over the Christmas shopping season. Retailers and manufacturers who will usher in the fourth quarter, the worst performance. Consumer Electronics Association expects fourth quarter revenue of consumer electronics market will grow 3.5%, while last year's fourth quarter revenue growth rate of 12.5%.

Davidowitz said: "As consumers shopping enthusiasm is low, if you are not consignment of products from other vendors but the independence sales, then you may be in trouble."

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