Today, The Washington Post reported, via the Associated Press, that Circuit City filed for bankruptcy protection today in New York. It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a reorganization plan.
According to JPMorgan analyst Christopher Horvers, “this isn’t a surprise.” Horvers goes on to say, “At the end of the day I think it’s really about an inventory position … If they can get inventory into the stores, I can think they’ll remain competitive.”
Obviously, Horvers has not recently gone into a Circuit City store. Circuit City’s failure has nothing to do with their inventory position. It’s their horrible customer service and dysfunctional store layout that is crippling their ability to compete. On top of that, it’s the recession and credit strapped consumers’ inability to buy anything on their maxed out credit cards that will prevent any plan of reorganization from succeeding.
It doesn’t take a rocket scientist or a Wall Street financial analyst to figure this one out. All you have to do is visit a local Circuit City store and try to find and buy something. During times of recession, retailers need to bend over backwards and go out of their way to improve, faciliate, and expedite the shopping experience. This is where Circuit City has failed miserably. It for this primary reason that Circuit City will close its doors and re-emerge from bankruptcy under another name, likely Target, Walmart, or Best Buy.
December 12th, 2008 at 2:54 am
The number of the consumers filing for bankruptcy is overwhelming. About ten million households declare bankruptcy each year. Payday loans have been on the forefront of criticism and have been blamed for this financial misfortune. Payday loans have more storefronts than there are McDonalds and Starbucks combined. Since the need for financial assistance is increasing and the people are running to payday loans to alleviate their sudden need of money. There has also been a lot of negative media claiming payday loans are the cause of many individuals filing for bankruptcy. Educate yourself with the right information and details. Those who apply for payday loans are adults who have the ability to make responsible financial decisions. Borrowing more money than you can afford to pay back is the fault of the borrower, not the lender. Through a study by Vanderbilt Law School, Assistant Professor Paige Marta Skiba claims applicants that were approved for payday loans were more likely to file bankruptcy than those who did not. It’s clear that those who were applying for the loans are applying because they need money. Bankruptcy is caused by the irresponsible use of money. Those who have a tendency to both need money and spend it irresponsibly are on the road to bankruptcy. The main point is that payday loans are not the reason for the cycle of debt that many have willingly thrown themselves into. It is unfair to blame the lender for an individual’s irresponsibility. Click here to learn more on Payday Loans.