Circuit City pulls the plug; 50 jobs lost here
Circuit City Inc., the second-largest consumer electronics retailer in the nation, said Friday it will liquidate its remaining 567 stores, including its Medford Center operation.
The company announced the move after it was unable to renegotiate its debt with creditors and lenders and was unable to find a buyer. The move will put 30,000 people out of work, including approximately 50 in Medford.
Circuit City filed for Chapter 11 bankruptcy protection in November, and closed 150 stores, as vendors began restricting the flow of merchandise to the store ahead of the busy holiday shopping season.
Once the largest consumer electronics firm, Richmond, Va.-based Circuit City slipped against electronics rival Best Buy Co. and broader-based retailers Wal-Mart and Sears.
"We don't have any information at the store level," local general manager Dave Smith said. "That's as far as I'm going to go."
Employees expected the store to close within 90 days.
Mike Beugli, manager at the Medford Sears store adjacent to Circuit City, said the loss of a neighboring competitor has long-term ramifications.
"I hate to see somebody go down," Beugli said. "Especially Circuit City, the No. 2 seller. It's an obvious concern when someone has pretty good strength that's not able to weather the storm."
Head-to-head competition for electronics dollars, bolstered both stores.
"We both compete aggressively for customers and normally have the same kind of products," Beugli said. "I'd like to say we provided better service and, because of our price-match guarantee, we could beat them when it comes down to the bottom line."
Beugli said he was worried that the closure would affect neighboring businesses like Sears.
"My concern would be that we won't have somebody right next door drive a lot of foot traffic," Beugli said. "If Best Buy builds away from us, that is one reason to go somewhere else and not Sears. That concerns me, because I'd rather have a competitors right next door than across town."
Circuit City opened its 20,000-square-foot Medford Center store in July 1997. There were about 500 applicants for 50 positions.
The retailer's lease with shopping center owner Kimco Properties wasn't due to expire through 2018.
"We will be looking for retailers wanting to come into Medford area that need that kinds of square footage," a Kimco spokesperson said. "It's definitely an opportunity for a prime position."
Circuit City had explored ownership options since May, when it opened its books to Blockbuster Inc. The Dallas-based movie-rental chain made a takeover bid of more than $1 billion, with plans to create a 9,300-store chain to sell electronic gadgets and rent movies and games. But the sagging economy led Blockbuster to withdraw its bid last July.
In 2003, Circuit City fired or reduced commissions for 3,900 employees — 20 percent of its workforce. In March of 2007 the company laid off 3,400 lower level employees.
Reach reporter Greg Stiles at 776-4463 or e-mail firstname.lastname@example.org.