phil'spal's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/244112/comments http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-366649 366649
no major surprises, but here's a brief update on the Intertan story:

(www.globeinvestor.com/.../)

some interest shown in a purchase as a going concern including the rumoured best buy interest and the management buyout bid. still all speculation, of course, and any acceptance of a proposal is subject to court approval, but the article does echo my concern about the difficulty in finding financing to get the deal done. if management wants to buy it out, i hope the courts insist on them putting a healthy chunk of their own cold hard cash on the line and put safeguards in place to prevent them from milking the company dry, stiffing creditors and/or shareholders and repeating all of the abuses we've seen at CC before they walk away from it after the golden teat has dried up.]]> Mon, 26 Jan 2009 13:00:09 -0500
no major surprises, but here's a brief update on the Intertan story:

(www.globeinvestor.com/.../)

some interest shown in a purchase as a going concern including the rumoured best buy interest and the management buyout bid. still all speculation, of course, and any acceptance of a proposal is subject to court approval, but the article does echo my concern about the difficulty in finding financing to get the deal done. if management wants to buy it out, i hope the courts insist on them putting a healthy chunk of their own cold hard cash on the line and put safeguards in place to prevent them from milking the company dry, stiffing creditors and/or shareholders and repeating all of the abuses we've seen at CC before they walk away from it after the golden teat has dried up.]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-364979 364979
the question still remains: who is willing and/or able to finance the project? they didnt have much luck finding anybody for CCTY. granted, this is smaller scale, but the banks have their hands full with their own problems and the retail sector is in shambles. it wont be any picnic finding private financing either, but who knows.... if the price is right, anything could happen.

maybe cimino could hook up with john thain and buy into it. of course, the first thing to get done would have to be the office redecorations. ]]> Sat, 24 Jan 2009 12:11:46 -0500
the question still remains: who is willing and/or able to finance the project? they didnt have much luck finding anybody for CCTY. granted, this is smaller scale, but the banks have their hands full with their own problems and the retail sector is in shambles. it wont be any picnic finding private financing either, but who knows.... if the price is right, anything could happen.

maybe cimino could hook up with john thain and buy into it. of course, the first thing to get done would have to be the office redecorations. ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-364572 364572
today was the deadline for filing of proposals for the sale of The Source in Canada. that's about all we'll get for now, since nobody's offering any particulars to the public. i did find an article which explains the delay, but says nothing about the terms of operation while in this phase.

"Through a third-party, court-appointed monitor, potential buyers were
encouraged to show their interest last month. In all, 16 groups expressed
interest in buying the Canadian corporation. Ronald Cuthbertson left his job Dec. 17 as president of InterTAN in hopes of putting together a bid
proposal.
Some were selected from that group to make formal proposals. That deadline is today. Who is pitching to purchase the Barrie-based corporation and how many groups is not being revealed. “It could be weeks, it could be a few months…and then announce a winner,” "

(www.thebarrieexaminer....)

there ya go... more drama, suspense and intrigue. have a great weekend!]]> Fri, 23 Jan 2009 17:33:51 -0500
today was the deadline for filing of proposals for the sale of The Source in Canada. that's about all we'll get for now, since nobody's offering any particulars to the public. i did find an article which explains the delay, but says nothing about the terms of operation while in this phase.

"Through a third-party, court-appointed monitor, potential buyers were
encouraged to show their interest last month. In all, 16 groups expressed
interest in buying the Canadian corporation. Ronald Cuthbertson left his job Dec. 17 as president of InterTAN in hopes of putting together a bid
proposal.
Some were selected from that group to make formal proposals. That deadline is today. Who is pitching to purchase the Barrie-based corporation and how many groups is not being revealed. “It could be weeks, it could be a few months…and then announce a winner,” "

(www.thebarrieexaminer....)

there ya go... more drama, suspense and intrigue. have a great weekend!]]> http://seekingalpha.com/article/115235-circuit-city-s-liquidation-schoonover-could-have-saved-it-but-didn-t?source=feed#comment-362119 362119
you're right that carrying unproductive real estate had a lot to do with their unravelling but let's look a little deeper. not only did schoonover neglect that aspect of their operation, (it was only weeks before the great collapse that they finally scrubbed their new distribution centre) he tried to 'turn it around' through expanding their store count. wrong approach and a bad idea when you consider that a bigger problem was that their year over year same store sales were dropping. in effect, the problem was not directly addressed. their 'solution' to slumping sales only compounded the original problem. however, again, you're right, harvard biz school can perform the final autopsy because it's all academic from here... except for the intertan issue in canada. court date is for tomorrow. mark me down for 'no credible buyers could be found'.

wow! i just passed 100 posts!
]]> Wed, 21 Jan 2009 13:35:00 -0500
you're right that carrying unproductive real estate had a lot to do with their unravelling but let's look a little deeper. not only did schoonover neglect that aspect of their operation, (it was only weeks before the great collapse that they finally scrubbed their new distribution centre) he tried to 'turn it around' through expanding their store count. wrong approach and a bad idea when you consider that a bigger problem was that their year over year same store sales were dropping. in effect, the problem was not directly addressed. their 'solution' to slumping sales only compounded the original problem. however, again, you're right, harvard biz school can perform the final autopsy because it's all academic from here... except for the intertan issue in canada. court date is for tomorrow. mark me down for 'no credible buyers could be found'.

wow! i just passed 100 posts!
]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-362065 362065
i dont know enough about the court rulings to answer your questions. we'll both find out tomorrow]]> Wed, 21 Jan 2009 12:56:44 -0500
i dont know enough about the court rulings to answer your questions. we'll both find out tomorrow]]> http://seekingalpha.com/article/115153-best-buy-bounces-on-circuit-city-closure?source=feed#comment-358497 358497
as right as you are about management greed, i wish you were right about the 50% margins! big tickets are nowhere near that, and the terms arent nearly as forgiving as that. suppliers will eat you alive if you let them. it's a tough racket, and dummies don't last forever. (refer to headline. i rest my case)]]> Sat, 17 Jan 2009 12:46:56 -0500
as right as you are about management greed, i wish you were right about the 50% margins! big tickets are nowhere near that, and the terms arent nearly as forgiving as that. suppliers will eat you alive if you let them. it's a tough racket, and dummies don't last forever. (refer to headline. i rest my case)]]> http://seekingalpha.com/article/115141-circuit-city-closing-time?source=feed#comment-358490 358490
looks like in the short term, anyway, BBY (up 8% y'day) is the biggest net beneficiary of CCTY's fall (other than lawyers and liquidators). here's hoping they dont get arrogant or complacent. it's a great opportunity for them to cultivate a whole lot more market share. there's a definite need for a specialist electronics outlet, the kind that dept stores just cannot provide. if they make sure that their training programs are a major priority and they can offer their customers a heightened sense of confidence in shopping there, i think they'll be able to create an incredible brand with a truly unique presence in the market. when the economy turns around, BBY should be able to offer what no other electronics outlet can and in so doing, will surely make some big coin for its investors.]]> Sat, 17 Jan 2009 12:34:30 -0500
looks like in the short term, anyway, BBY (up 8% y'day) is the biggest net beneficiary of CCTY's fall (other than lawyers and liquidators). here's hoping they dont get arrogant or complacent. it's a great opportunity for them to cultivate a whole lot more market share. there's a definite need for a specialist electronics outlet, the kind that dept stores just cannot provide. if they make sure that their training programs are a major priority and they can offer their customers a heightened sense of confidence in shopping there, i think they'll be able to create an incredible brand with a truly unique presence in the market. when the economy turns around, BBY should be able to offer what no other electronics outlet can and in so doing, will surely make some big coin for its investors.]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-358459 358459
i picked the wrong day to defrag my hard drive! i'm still catching up on all the feeds, releases and blogs. if i got it straight, the canadian court date is jan 23, and they're looking for a buyer of the going concern. i may be all wrong, but this could easily end up as a repeat performance of their day in US court. difficult economic climate, and reluctant lenders limit the number of possible buyers. whoever they may be, they will have to have deep pockets ,an established network of suppliers and an uncharacteristically optimistic view of the company's ability to prosper in the existing environment. granted, from what i've seen, the cdn operation didnt do as badly as their american stores, but if somebody is going to tell me that they actually did well, they should be prepared to show me. there's no victory in doing big dollars when it's all done with loss leaders. we're coming into the days of retail doldrums. for the most part, the market has been glutted and the consumer already has all the toys and all the maxed credit cards they can use for now. pricing pressure will be high and margins will be squeezed. short term cash flow is going to be light. the major competitors are all still there as are all the fixed overhead expenses. we might be in for a kickass 2010 retail christmas (who knows?!) . it's a long wait between then and now but it's going to cost any buyer dearly to wait and see in the meantime. nope. i'm sorry, but i cant see a happier outcome in canada. ]]> Sat, 17 Jan 2009 11:42:05 -0500
i picked the wrong day to defrag my hard drive! i'm still catching up on all the feeds, releases and blogs. if i got it straight, the canadian court date is jan 23, and they're looking for a buyer of the going concern. i may be all wrong, but this could easily end up as a repeat performance of their day in US court. difficult economic climate, and reluctant lenders limit the number of possible buyers. whoever they may be, they will have to have deep pockets ,an established network of suppliers and an uncharacteristically optimistic view of the company's ability to prosper in the existing environment. granted, from what i've seen, the cdn operation didnt do as badly as their american stores, but if somebody is going to tell me that they actually did well, they should be prepared to show me. there's no victory in doing big dollars when it's all done with loss leaders. we're coming into the days of retail doldrums. for the most part, the market has been glutted and the consumer already has all the toys and all the maxed credit cards they can use for now. pricing pressure will be high and margins will be squeezed. short term cash flow is going to be light. the major competitors are all still there as are all the fixed overhead expenses. we might be in for a kickass 2010 retail christmas (who knows?!) . it's a long wait between then and now but it's going to cost any buyer dearly to wait and see in the meantime. nope. i'm sorry, but i cant see a happier outcome in canada. ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-356716 356716
i had a few minutes to kill this morning, so i eavesdropped on the google finance ccty discussion board. i think it should be formally recognized somewhere as the official meeting place of panic and greed. ]]> Thu, 15 Jan 2009 12:35:38 -0500
i had a few minutes to kill this morning, so i eavesdropped on the google finance ccty discussion board. i think it should be formally recognized somewhere as the official meeting place of panic and greed. ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-351711 351711
i think you might be right about Pliego, but he's disallowed from being an officer or director of a US company til 2011. (www.forbes.com/markets...) the walmart spin surprises me but i would never challenge it in this environment. hey... it could still even be a 'pump and dump'. the next few days are going to be tense in richmond.

we've been making some good calls here, but turning it into cash is still the big challenge. there's so much static and spurious sh*t flying around that even the best shot callers can get whipsawed in a heartbeat. seems like there's always something that comes right out of left field that squashes the best analysis like a frog on a freeway. throw the selective release of info (fact or fiction) from head office into the mix and randomness becomes an even bigger factor.'ceteris paribus' (all things being equal) is a condition only occurring in textbooks and wishful thinking. the boys that are trying to make money from this are either insiders or crap shooters.

i havent seen any reports as yet. i thought they were due out on the 9th. did i miss something?]]> Sat, 10 Jan 2009 12:12:01 -0500
i think you might be right about Pliego, but he's disallowed from being an officer or director of a US company til 2011. (www.forbes.com/markets...) the walmart spin surprises me but i would never challenge it in this environment. hey... it could still even be a 'pump and dump'. the next few days are going to be tense in richmond.

we've been making some good calls here, but turning it into cash is still the big challenge. there's so much static and spurious sh*t flying around that even the best shot callers can get whipsawed in a heartbeat. seems like there's always something that comes right out of left field that squashes the best analysis like a frog on a freeway. throw the selective release of info (fact or fiction) from head office into the mix and randomness becomes an even bigger factor.'ceteris paribus' (all things being equal) is a condition only occurring in textbooks and wishful thinking. the boys that are trying to make money from this are either insiders or crap shooters.

i havent seen any reports as yet. i thought they were due out on the 9th. did i miss something?]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-350683 350683
Intertan, the canadian company filed a report today as well, saying that "the Company expects to receive formal proposals before the end of January." from prospective interested buyers. (www.marketwire.com/pre...) this is a little more credible, but again, no details given other than a play (or is it a plea?) to keep the circus in town to the end of the month. ]]> Fri, 09 Jan 2009 10:25:03 -0500
Intertan, the canadian company filed a report today as well, saying that "the Company expects to receive formal proposals before the end of January." from prospective interested buyers. (www.marketwire.com/pre...) this is a little more credible, but again, no details given other than a play (or is it a plea?) to keep the circus in town to the end of the month. ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-340731 340731
further to my last posting:

with no redeeming information coming from the latest news, i cant imagine their situation improving at all. if anything, it continues to worsen. the expense concerns that you mention are all valid but everybody is talking about hotel rooms, you-tube PR plays and tinkering with severance pkg's for phil. it's too late to be just nibbling at the edges. at next reporting, there wont be anywhere to hide. that is probably the point at which the big picture will finally become undeniably obvious and the last benefit of the last doubt will be soundly snuffed. If the banks and creditors continue to finance this farce, i regret to say that they deserve all the misfortune that will surely follow.

and on that happy note, Happy Holidays and here's to a much happier New Year for us all!]]> Mon, 29 Dec 2008 14:02:59 -0500
further to my last posting:

with no redeeming information coming from the latest news, i cant imagine their situation improving at all. if anything, it continues to worsen. the expense concerns that you mention are all valid but everybody is talking about hotel rooms, you-tube PR plays and tinkering with severance pkg's for phil. it's too late to be just nibbling at the edges. at next reporting, there wont be anywhere to hide. that is probably the point at which the big picture will finally become undeniably obvious and the last benefit of the last doubt will be soundly snuffed. If the banks and creditors continue to finance this farce, i regret to say that they deserve all the misfortune that will surely follow.

and on that happy note, Happy Holidays and here's to a much happier New Year for us all!]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-340686 340686
i read the articles, (thanks for those). i was curious to see how the numbers shook out for the season. i cannot believe that after reporting that "Sales at Circuit City have fallen between 43 percent and 50 percent since the chain filed for Chapter 11 protection on Nov. 10...almost double the retailer’s projected sales decline of 28 percent", Cimino has the temerity to tell us that these results “should not be considered a negative,” my eyes rolled so far back in my head, they got stuck there for a few seconds! PLEASE tell me in what world or cosmic dimension are these results considered positive? unless they've managed to double their margins, the problem is compounding. ok, i should get into that mindset for my bottom line comment: dont worry, there's only about 12 or 13 cents downside risk on the stock. how far wrong could ya go? ]]> Mon, 29 Dec 2008 13:18:06 -0500
i read the articles, (thanks for those). i was curious to see how the numbers shook out for the season. i cannot believe that after reporting that "Sales at Circuit City have fallen between 43 percent and 50 percent since the chain filed for Chapter 11 protection on Nov. 10...almost double the retailer’s projected sales decline of 28 percent", Cimino has the temerity to tell us that these results “should not be considered a negative,” my eyes rolled so far back in my head, they got stuck there for a few seconds! PLEASE tell me in what world or cosmic dimension are these results considered positive? unless they've managed to double their margins, the problem is compounding. ok, i should get into that mindset for my bottom line comment: dont worry, there's only about 12 or 13 cents downside risk on the stock. how far wrong could ya go? ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-336871 336871 Tue, 23 Dec 2008 14:18:02 -0500 http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-331350 331350
congrats on your 500th post!

i just saw that BBY was offering the sep. paks. to head office staff. it looks like they're going about it the right way. stock is up big today too, so the market likes the strategy. note the contrast with decimating the best of their sales force as per CC last year. i think it's a matter of being proactive rather than reactive. good call by management. the market share migration from CC to BBY will take a while before it's really noticeable. liquidations and panic selling by all the players cloud the immediate effects. in the long haul, BBY should come out stronger for it.

canadad:

i'll second bill's kudos for your research! i perused your links. gotta tell ya... it's a giggle-free zone.... but most interesting nevertheless. i cant wait to see the list of prospective buyers. that's due tomorrow! i'll really stick my neck out here and say that it's not going to be a long one. i cant think of anybody out there that's cash rich and cant think of one thing to better invest their money in besides a failing electronics retailer with a scandalous legacy and a questionable future in a crummy sector. in this economy, i'd be buying into soup kitchens before i'd be buying intertan. Hmmmm.... unless they co-opted.... "FREE bowl of soup (with crackers and government cheese) with every iPod!"]]> Tue, 16 Dec 2008 16:13:34 -0500
congrats on your 500th post!

i just saw that BBY was offering the sep. paks. to head office staff. it looks like they're going about it the right way. stock is up big today too, so the market likes the strategy. note the contrast with decimating the best of their sales force as per CC last year. i think it's a matter of being proactive rather than reactive. good call by management. the market share migration from CC to BBY will take a while before it's really noticeable. liquidations and panic selling by all the players cloud the immediate effects. in the long haul, BBY should come out stronger for it.

canadad:

i'll second bill's kudos for your research! i perused your links. gotta tell ya... it's a giggle-free zone.... but most interesting nevertheless. i cant wait to see the list of prospective buyers. that's due tomorrow! i'll really stick my neck out here and say that it's not going to be a long one. i cant think of anybody out there that's cash rich and cant think of one thing to better invest their money in besides a failing electronics retailer with a scandalous legacy and a questionable future in a crummy sector. in this economy, i'd be buying into soup kitchens before i'd be buying intertan. Hmmmm.... unless they co-opted.... "FREE bowl of soup (with crackers and government cheese) with every iPod!"]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-320978 320978
Apparently, that's not unusual in bankruptcies. LG is going after their shipments too(another 25million). Morningstar reported on it and said:
"The requests follow U.S. rules that allow suppliers to ask for a return of goods provided for 45 days up to the point when Circuit City filed for protection" (news.morningstar.com/n...) How much of it they get back remains to be seen, but that gives those suppliers a bit of a legal edge over other creditors, at least for that amount. Other suppliers will get on the bandwagon too.

Sony's president had an opinion on CC's situation:"No one in their industry has ever survived a Chapter 11 bankruptcy, especially not on that scale." (gizmodo.com/5094428/wh...)

Once the recent shipment returns are satisfied and the staff is paid, there wont be a d*mn thing to reorganize other than backspacing from Chapter 11 to Chapter 7.
]]> Thu, 04 Dec 2008 13:49:04 -0500
Apparently, that's not unusual in bankruptcies. LG is going after their shipments too(another 25million). Morningstar reported on it and said:
"The requests follow U.S. rules that allow suppliers to ask for a return of goods provided for 45 days up to the point when Circuit City filed for protection" (news.morningstar.com/n...) How much of it they get back remains to be seen, but that gives those suppliers a bit of a legal edge over other creditors, at least for that amount. Other suppliers will get on the bandwagon too.

Sony's president had an opinion on CC's situation:"No one in their industry has ever survived a Chapter 11 bankruptcy, especially not on that scale." (gizmodo.com/5094428/wh...)

Once the recent shipment returns are satisfied and the staff is paid, there wont be a d*mn thing to reorganize other than backspacing from Chapter 11 to Chapter 7.
]]> http://seekingalpha.com/article/105988-media-companies-to-fed-tarp-me?source=feed#comment-306462 306462
sorry, but WMT and BBY beat them. they wont emerge from bankruptcy. when they've used up the DIP bucks, the courts will summon CC's accountants to ask one more question: "if you have 11 chapters and we take away 4 of them, where does that leave you?" ]]> Fri, 14 Nov 2008 20:24:45 -0500
sorry, but WMT and BBY beat them. they wont emerge from bankruptcy. when they've used up the DIP bucks, the courts will summon CC's accountants to ask one more question: "if you have 11 chapters and we take away 4 of them, where does that leave you?" ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-305459 305459
the brick and the source.... hmmmm..... not a great fit but it's better than victoria's secret starting to sell used auto parts. i really dont see that much synergy between the 2. remember that 1200 sq. ft. store footprint? how many sq. ft. does the average Best Buy devote just to television, bill? now put about 3000 SKU's in there (bearing in mind that 80% of them are under $25 in value.) that's a huge departure from brick's current model. their web site shows 68 SKU's in their accessories dept. then there is the matter of intertran's dealer network. will they want to or will they be able to service that part of the business? if not, that's almost half of their stores that dont figure into the equation anymore. the brick already has outlets in most reasonably populated areas. do they want to take on all that extra real estate? they could create an intertan sized store in most of their outlets by moving all of their beds and dining tables 4 inches closer together. what i'm getting at is that the differences seem to outweigh the similarities and the marrying of the two business models would be clumsy at best. what competitive advantage would make the joined 2 greater than the sum of their parts? would they benefit from better volume buying? not really. intertan is too small to survive on its own. hooking up with a dissimilar company would give them no better economy of scale. i dont know what they're thinking, but they'd get better value for their 40 to 100 million if they just bought beer with it and invited us over. (dibs on the leather lazy boy with the shaker option!)
]]> Thu, 13 Nov 2008 15:30:16 -0500
the brick and the source.... hmmmm..... not a great fit but it's better than victoria's secret starting to sell used auto parts. i really dont see that much synergy between the 2. remember that 1200 sq. ft. store footprint? how many sq. ft. does the average Best Buy devote just to television, bill? now put about 3000 SKU's in there (bearing in mind that 80% of them are under $25 in value.) that's a huge departure from brick's current model. their web site shows 68 SKU's in their accessories dept. then there is the matter of intertran's dealer network. will they want to or will they be able to service that part of the business? if not, that's almost half of their stores that dont figure into the equation anymore. the brick already has outlets in most reasonably populated areas. do they want to take on all that extra real estate? they could create an intertan sized store in most of their outlets by moving all of their beds and dining tables 4 inches closer together. what i'm getting at is that the differences seem to outweigh the similarities and the marrying of the two business models would be clumsy at best. what competitive advantage would make the joined 2 greater than the sum of their parts? would they benefit from better volume buying? not really. intertan is too small to survive on its own. hooking up with a dissimilar company would give them no better economy of scale. i dont know what they're thinking, but they'd get better value for their 40 to 100 million if they just bought beer with it and invited us over. (dibs on the leather lazy boy with the shaker option!)
]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-304524 304524
i think as far as retail sectors go, CE is probably the one i'd rather be in over any other. that's the trendy stuff that every member of the family seems to enjoy in one form or another. if people spend less, the average dollar per ticket gets a little smaller. add-ons and upsells are going to be what separate the clerks from the real sales pros. the key is going to boil down to getting the traffic into the store. again, i'm sure that BBY has some huge advantages there, including, but not limited to their reputation for professional and knowlegeable sales staff. CC or WMT dont have that. BBY should be able to pick up a good chunk of CC's customer base just because of CC's stigma as a bankrupt outlet. CC's floundering will show in their execution over the next 6 or 7 weeks. that will cost them sales, but it will also chase customers to BBY.

i dont know where you are, but some parts of the country are in deep economic doo doo. others, not so bad. that's why averages dont tell the whole story. it's going to be a down year. BBY knows that and have guided down, but sales are still made one at a time, and as long as BBY has their inventory in place and their advertising is communicating the value they can offer to the customer, capable motivated sales staff will get their share of the christmas pie. it wont be fun competing with a liquidator, and depending on how they do it, could pollute the CE market with a lot of downward price pressure in the short haul. BBY is aware of that and i'm sure that they have given due consideration to how best to go up against it.

in the CE market, BBY is truly the best of breed for all of the reasons that you listed. they'll take some hits this season, along with everybody else, but they'll still be here tomorrow, poised to make the best of a better future economic climate.]]> Wed, 12 Nov 2008 17:19:03 -0500
i think as far as retail sectors go, CE is probably the one i'd rather be in over any other. that's the trendy stuff that every member of the family seems to enjoy in one form or another. if people spend less, the average dollar per ticket gets a little smaller. add-ons and upsells are going to be what separate the clerks from the real sales pros. the key is going to boil down to getting the traffic into the store. again, i'm sure that BBY has some huge advantages there, including, but not limited to their reputation for professional and knowlegeable sales staff. CC or WMT dont have that. BBY should be able to pick up a good chunk of CC's customer base just because of CC's stigma as a bankrupt outlet. CC's floundering will show in their execution over the next 6 or 7 weeks. that will cost them sales, but it will also chase customers to BBY.

i dont know where you are, but some parts of the country are in deep economic doo doo. others, not so bad. that's why averages dont tell the whole story. it's going to be a down year. BBY knows that and have guided down, but sales are still made one at a time, and as long as BBY has their inventory in place and their advertising is communicating the value they can offer to the customer, capable motivated sales staff will get their share of the christmas pie. it wont be fun competing with a liquidator, and depending on how they do it, could pollute the CE market with a lot of downward price pressure in the short haul. BBY is aware of that and i'm sure that they have given due consideration to how best to go up against it.

in the CE market, BBY is truly the best of breed for all of the reasons that you listed. they'll take some hits this season, along with everybody else, but they'll still be here tomorrow, poised to make the best of a better future economic climate.]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-303036 303036
one afterthought: and now that CC is delisted, nobody's even going to notice.]]> Tue, 11 Nov 2008 11:56:16 -0500
one afterthought: and now that CC is delisted, nobody's even going to notice.]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-302922 302922
i'd be shocked and amazed if there were any value there by june. adding the trustee expense adds another backward step for them. now that they have financing to bring in all that inventory, there is the matter of whether anybody is going to buy it. even the strongest players in the CE market arent expecting big numbers. given the uncertainty of CC's fate, buyers will be less willing to spend their loot there for fear that the company vanishes shortly after the sale. if the sell through isnt there, cash flow takes a pounding and an inventory glut cripples them that much more. aggressive pricing would keep the inventory moving, but how much margin compression are they prepared to endure given their tenuous position? their competitors will make the most of their strengths. CC doesnt have any strengths. they wont to catch a break here. it's going to be a bloodbath. ]]> Tue, 11 Nov 2008 10:03:50 -0500
i'd be shocked and amazed if there were any value there by june. adding the trustee expense adds another backward step for them. now that they have financing to bring in all that inventory, there is the matter of whether anybody is going to buy it. even the strongest players in the CE market arent expecting big numbers. given the uncertainty of CC's fate, buyers will be less willing to spend their loot there for fear that the company vanishes shortly after the sale. if the sell through isnt there, cash flow takes a pounding and an inventory glut cripples them that much more. aggressive pricing would keep the inventory moving, but how much margin compression are they prepared to endure given their tenuous position? their competitors will make the most of their strengths. CC doesnt have any strengths. they wont to catch a break here. it's going to be a bloodbath. ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-302427 302427
while we're playing with what-if's, yeah, i could see both being interested if the price was right (cheaper than dirt), but i could also see both of them dropping out in a flash if they thought they were being played. i'd pay to be able to watch that poker game!

both would benefit from the acquisition, but for different reasons. RS would just be getting back what they had in the first place. easy transition and an instant 30 million market population expansion. RS is still a high profile name, better than 'the source' ever was. they could hit the ground running. BBI would be getting market exposure and visibility that was hitherto only dreamed of. the smaller store footprint may not be too much of a hindering factor at all given the nature of their business. they tend to prefer spaces with access directly from the outside so how to handle enclosed mall stores would need a rethink. with some tweaking of their business model though, they could come out of it with a new and improved way of getting their biz done... and maybe even a great test market for an eventual US national rollout of the new model. both of those scenarios make a whole lot more sense and have much greater potential for intertan than their present status of being the feisty little sister that's trying to live down the family's scandalous reputation. ]]> Mon, 10 Nov 2008 18:58:58 -0500
while we're playing with what-if's, yeah, i could see both being interested if the price was right (cheaper than dirt), but i could also see both of them dropping out in a flash if they thought they were being played. i'd pay to be able to watch that poker game!

both would benefit from the acquisition, but for different reasons. RS would just be getting back what they had in the first place. easy transition and an instant 30 million market population expansion. RS is still a high profile name, better than 'the source' ever was. they could hit the ground running. BBI would be getting market exposure and visibility that was hitherto only dreamed of. the smaller store footprint may not be too much of a hindering factor at all given the nature of their business. they tend to prefer spaces with access directly from the outside so how to handle enclosed mall stores would need a rethink. with some tweaking of their business model though, they could come out of it with a new and improved way of getting their biz done... and maybe even a great test market for an eventual US national rollout of the new model. both of those scenarios make a whole lot more sense and have much greater potential for intertan than their present status of being the feisty little sister that's trying to live down the family's scandalous reputation. ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-302317 302317
the gestalt 'AHA'! it sure is plausible, isnt it! until i saw that banner, i'd completely forgotten about BBI's history with CC. they could make something of the situation. your hypothetical works!

one other possibility to muse on is them trying to create competition between RS and BBI. i'm sure that CC would be happier selling intertan than keeping it. that's why they've taken some pains to make it look as good as possible.

as our experience with greed has taught us, something is always more valuable if somebody else also wants it. could be that they'd like to get each of them to worry that the other is going to steal it, thereby hopefully forcing a cash offer of some kind that they can put to use before they go down in flames and in so doing, get nothing for it .

either way, they might actually salvage something out of it. i think it just got a little more interesting again! game on, my friend!]]> Mon, 10 Nov 2008 16:30:50 -0500
the gestalt 'AHA'! it sure is plausible, isnt it! until i saw that banner, i'd completely forgotten about BBI's history with CC. they could make something of the situation. your hypothetical works!

one other possibility to muse on is them trying to create competition between RS and BBI. i'm sure that CC would be happier selling intertan than keeping it. that's why they've taken some pains to make it look as good as possible.

as our experience with greed has taught us, something is always more valuable if somebody else also wants it. could be that they'd like to get each of them to worry that the other is going to steal it, thereby hopefully forcing a cash offer of some kind that they can put to use before they go down in flames and in so doing, get nothing for it .

either way, they might actually salvage something out of it. i think it just got a little more interesting again! game on, my friend!]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-302202 302202
you nailed it. after all the BS since august, those numbers are meaningless. in a sane world, an auditor would be put in there before anybody did anything else. ]]> Mon, 10 Nov 2008 14:43:14 -0500
you nailed it. after all the BS since august, those numbers are meaningless. in a sane world, an auditor would be put in there before anybody did anything else. ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-302196 302196
i agree with you about the overstatement of assets, but a lot depends on how the courts value them, and how much debt and obligation they'll allow to disappear. creditors will likely get an even unhappier settlement, if at all. re: the carmax leases, the landlords are as much creditors as those that offered the CC store leases, therefore should be treated the same way.

as far as restructuring goes, the fundamentals dont change. their name is shot. they have no value to offer. therefore acquiring new credit will be difficult to impossible, an equity offering would amusing to hilarious and i'd suspect any private investing of being a money laundering scheme. they will no doubt be forced into the price slashing that usually happens when a market sector gets hungry and they're the least well equipped to participate in anything like that. pricing pressure will continue to eat their bottom line. their lot will not likely be much better after christmas.

they filed ch11 themselves, it wasnt the creditors. had the creditors filed, they may have gone directly to ch7. this still allows them at least a little control in that it buys them some time and keeps the padlocks off the doors. the vendors will still get some sell-through for the holiday season, and payroll checks wont bounce for the time being. they'll be happy to worry about the details after new year, but it still looks like a dead end tunnel to me.

here's a link regarding the canadian filing;

www.globeinvestor.com/.../

another interesting tidbit that i noticed, for what it's worth is a banner on their canadian website, offering a $15 Blockbuster gift card free with a $99 purchase from the source's online store. hmmmm.... could it be that blockbuster has their foot in the door for the cdn operation? that's just me wondering out loud. ]]> Mon, 10 Nov 2008 14:37:13 -0500
i agree with you about the overstatement of assets, but a lot depends on how the courts value them, and how much debt and obligation they'll allow to disappear. creditors will likely get an even unhappier settlement, if at all. re: the carmax leases, the landlords are as much creditors as those that offered the CC store leases, therefore should be treated the same way.

as far as restructuring goes, the fundamentals dont change. their name is shot. they have no value to offer. therefore acquiring new credit will be difficult to impossible, an equity offering would amusing to hilarious and i'd suspect any private investing of being a money laundering scheme. they will no doubt be forced into the price slashing that usually happens when a market sector gets hungry and they're the least well equipped to participate in anything like that. pricing pressure will continue to eat their bottom line. their lot will not likely be much better after christmas.

they filed ch11 themselves, it wasnt the creditors. had the creditors filed, they may have gone directly to ch7. this still allows them at least a little control in that it buys them some time and keeps the padlocks off the doors. the vendors will still get some sell-through for the holiday season, and payroll checks wont bounce for the time being. they'll be happy to worry about the details after new year, but it still looks like a dead end tunnel to me.

here's a link regarding the canadian filing;

www.globeinvestor.com/.../

another interesting tidbit that i noticed, for what it's worth is a banner on their canadian website, offering a $15 Blockbuster gift card free with a $99 purchase from the source's online store. hmmmm.... could it be that blockbuster has their foot in the door for the cdn operation? that's just me wondering out loud. ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-301669 301669
CNBC just announced that CC has filed for Ch. 11. ]]> Mon, 10 Nov 2008 08:10:22 -0500
CNBC just announced that CC has filed for Ch. 11. ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-301663 301663
msnbc just announced that CC has filed for Ch. 11. ]]> Mon, 10 Nov 2008 08:05:18 -0500
msnbc just announced that CC has filed for Ch. 11. ]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-300327 300327
i think i know what's going on with the discrepancy. the liquidation also includes in-store and online promotions across the whole store chain, not restricted to the terminating outlets. the canadian branch is blowing stuff out too. i'm sure that they're counting all of that into the $350MM. at the store level, they're pushing to offload the devalued and shop-worn crap that's been polluting the shelves for too long. good time to replace that 8track player!]]> Fri, 07 Nov 2008 14:41:25 -0500
i think i know what's going on with the discrepancy. the liquidation also includes in-store and online promotions across the whole store chain, not restricted to the terminating outlets. the canadian branch is blowing stuff out too. i'm sure that they're counting all of that into the $350MM. at the store level, they're pushing to offload the devalued and shop-worn crap that's been polluting the shelves for too long. good time to replace that 8track player!]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-300246 300246
great job! hilco could be doing this on a fee/commission for services basis. i doubt if they'd buy the inventory outright at anything above liquidator prices around 10-15 cents on the dollar. it would make more sense at that price for CC to just redistribute, but what do i know? common sense, as i have been told is not always commonly sensed. you're right that a 30% discount is just a starting point with these situations, and the price cuts accelerate as they get closer to the deadline, often down to near giveaway prices. that creates a waiting game for bargain hound customers. "it'll be cheaper tomorrow, but it might be sold out." i've witnessed similar close-outs. you can see the vultures circling every day, looking hungrier and hungrier. looking at your very plausible analysis, i cant see anything that resembles a catalyst to get the share price above NYSE's minimum of $1, nor would the stock be likely in this market to pull off a 400% upside run.

since Tweeter sold to the liquidator, there have been some interesting comments to the article that you referenced earlier. the fallout came as a surprise to some. for example, the staff were informed that they were responsible for their draw balances (they are supposed to return any prepaid commissions that werent earned). what a magnificent kick in the teeth after being sacked, huh! also, customers with prepaid product to be picked up, repairs in shop, installs pending, are considered creditors. that is, their money, product, unfulfilled work orders are seized by the liquidator and now property of the liquidator. i dont know if tweeter had gift cards, but i feel safe in assuming that any unused ones still in circulation are also worthless. here's the link if you want to compare scenarios:

www.twice.com/index.as...

note to fat lady: "one more time, this time with feeling! a 1 and a 2 and a"

]]> Fri, 07 Nov 2008 13:06:22 -0500
great job! hilco could be doing this on a fee/commission for services basis. i doubt if they'd buy the inventory outright at anything above liquidator prices around 10-15 cents on the dollar. it would make more sense at that price for CC to just redistribute, but what do i know? common sense, as i have been told is not always commonly sensed. you're right that a 30% discount is just a starting point with these situations, and the price cuts accelerate as they get closer to the deadline, often down to near giveaway prices. that creates a waiting game for bargain hound customers. "it'll be cheaper tomorrow, but it might be sold out." i've witnessed similar close-outs. you can see the vultures circling every day, looking hungrier and hungrier. looking at your very plausible analysis, i cant see anything that resembles a catalyst to get the share price above NYSE's minimum of $1, nor would the stock be likely in this market to pull off a 400% upside run.

since Tweeter sold to the liquidator, there have been some interesting comments to the article that you referenced earlier. the fallout came as a surprise to some. for example, the staff were informed that they were responsible for their draw balances (they are supposed to return any prepaid commissions that werent earned). what a magnificent kick in the teeth after being sacked, huh! also, customers with prepaid product to be picked up, repairs in shop, installs pending, are considered creditors. that is, their money, product, unfulfilled work orders are seized by the liquidator and now property of the liquidator. i dont know if tweeter had gift cards, but i feel safe in assuming that any unused ones still in circulation are also worthless. here's the link if you want to compare scenarios:

www.twice.com/index.as...

note to fat lady: "one more time, this time with feeling! a 1 and a 2 and a"

]]> http://seekingalpha.com/article/97866-circuit-city-falls-further-bring-out-your-dead?source=feed#comment-299833 299833
i'm not sure about what Hilco would charge for their services to CC, but auctioneers can charge upwards of 20-35%. by the time all of the pipers are paid, CC might lucky to see 10 or 15 cents on the dollar before termination costs. how does that compare with your tally?]]> Thu, 06 Nov 2008 22:30:05 -0500
i'm not sure about what Hilco would charge for their services to CC, but auctioneers can charge upwards of 20-35%. by the time all of the pipers are paid, CC might lucky to see 10 or 15 cents on the dollar before termination costs. how does that compare with your tally?]]>