“I didn’t say it was your fault. I said I was going to blame it on you.” — Anonymous
Former Circuit City employees took a direct hit when the company closed. But the fallout is still spreading far beyond the walls of Circuit City’s echoing stores. If you think you aren’t affected, think again. Here are some random thoughts about who has taken a hit and what might change as a result of The City’s death.
New School Bus Routes
Circuit City left 18.7 million square feet of empty retail and warehouse space. They abandoned over 575 leases. Across the country, mall and shopping center owners – who were already sweating – are hyperventilating. One well-meaning, ivory tower-dwelling person suggested they use the big-box stores for schools. It’s not a stretch to imagine converting Circuit City’s former headquarters campus, but what municipality has the coin to rent the typical Circuit City store space?
Up Your Credit Limit
You’re going to need it. PCs and TVs are going to get more expensive with the blow that the big electronics manufacturers took. HP may never get the $120 million Circuit City owes it. Samsung is waiting for $115 million and Sony is out $60 million. These companies were already getting flogged by the economy. Another 20+ manufacturers are in the same boat, big names including Toshiba, Garmin, Panasonic, Monster, and Kodak.
No More Newspapers
I’m not very sympathetic of the media. But newspapers are run by people and, although I don’t like what they do, their fates matter. The industry is already fighting to stay afloat, and now Circuit City’s colorful Sunday inserts are gone. This could mean as much as a 10% reduction ad revenue for local papers.
Small Business Shock
Plenty of small businesses are struggling because of Circuit City. Cafe 56 in Cleveland counted on customer and employee business from a neighboring Circuit City store. Freelance photographer Scott Brown hopes to get paid some of the $30,000 he’s owed by Circuit City, but it’s not likely. It’s a shock to realize that big, established companies aren’t dependable any more.
And the Biggest Loser Is…
Shareholders! They won’t get a check worth the postage. On the last day of trading, shares closed at 10 cents. Former employees who held stock in their 401Ks are going to be retiring later, if at all. If you think you’re exempt because you didn’t own any stock, you might want to check your mutual fund holdings. Even moderate risk funds often dabble in high-risk investments, such as in the stock of a company who was looking for a last-minute buyout. It would’ve rewarded those shareholders who had nerves of steel very nicely.
I’m sure there are other businesses that have suffered too. What other stories can you add?