Is Circuit City Sellable?

We just read a Business Week story that ponders whether or not Circuit City is putting itself up for sale. The retailer is getting pressure from investor Mark Wattles, who owns a 6.5% stake in the company, and other investors, to make changes. And there are rumors, the article says, that Circuit City’s management has hired Goldman Sachs to look at strategic alternatives.

Though Circuit City posted a $4.9-million fourth-quarter profit, management predicts a loss of between $180 million and $195 million in the current quarter. Q4 same-store sales fell 10.4%, and for the coming year, they are expected to decline in the mid-single digits.

Despite this, the company is sticking to its store-opening pace, and management sees a future in its smaller “City”-branded stores.

Would Wattles, who founded Hollywood Entertainment and heads Ultimate Electronics, end up as a suitable buyer? Is Circuit City likely to get picked up by a rival? Or are there no buyers out there right now for an electronics retailer having issues?

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3 Responses to “Is Circuit City Sellable?”


  1. 1 deal junkie April 10, 2008 at 9:19 pm

    No. Circuit City is the second worst company in the world, next to Moody’s.

  2. 2 Nancy Hamel April 11, 2008 at 1:52 pm

    If anyone would want it, Ultimate Electronics would – they are both equally as unfriendly and difficult to traverse…and have the most unuseful (and invisible) sales people I’ve ever encountered.

  3. 3 David Littwitz April 16, 2008 at 9:01 am

    Circuit City being acquired by Blockbuster is like two drunks working furiously to hold each other upright. The elctronics business is constantly changing as the must have gadget of today is the 50% off sale item of tomorrow. Circuit City has tried to seem relevant, but they can’t seem to stay competitive with Best Buy. As for Blockbuster this is an example of ego overblown at it’s finest. New Blockbuster CEO Jim Keyes was thrown out of his prior position at 7-Eleven by his Japanese partners for underwhelming sales performance. After napping through his non-compete Blockbuster was the only firm willing to take on his flamboyance. now struggling with a business model that doesn’t fly and a product that is becoming easier to find (without Blockbuster’s help) every day, he reaches out for the grand gesture in hopes it will work and make hima hero. If it doesn’t, he hasn’t been at Blockbuster long enough for his stock holdings to have any real value so nothing ventured NOTHING GAINED.


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