Circuit City's Last Weekend

This is it--the last weekend of Circuit City's life as an appliance and electronics retailer. Ten years ago, before the dot-com bust, Circuit City's home page featured a free e-machine PC (after rebates). Yesterday, as shown above from the Houston Chronicle, the shelves are bare and the pickings very slim.

BusinessWeek writes about the role of liquidators and the mountain of merchandise they have to sell to settle the affairs of failed retailers. So few shoppers, so little time to liquidate.

The list of once vibrant, now defunct retailers goes on and on and on, from Kresge's (which founded Kmart decades ago) to B. Altman to Zayre's to . . . Circuit City and beyond. As the textbooks say, the Wheel of Retailing never stops revolving. What new retail craze will come along? And which store will be the next to close its doors forever?

Linens N Things Goes Away Forever

clipped from www.lnt.com

So many retailers are closing their doors forever. Circuit City is going away, Linens N Things too. Probably many more chains will announce bankruptcy plans before this challenging year is over.

But within a couple of weeks, I expect that huge markdowns will spread to nearly every retail firm, online as well as off. Deflation is going to be with us till 2009, yet the race is on to get prices as low as possible before Christmas and Hanukkah so stores can capture some share of holiday sales and avoid being stuck with inventory.

Even retailers who eventually report a .5% increase in same-store sales won't be talking too much about their lower profit margins--the real result of deflation that begins at the consumer level and spreads back into the supply chain.