While many retailers are understandably nervous about what this holiday will bring, none is likely more so than Circuit City.
Blockbuster rescinded an offer to buy the beleaguered chain earlier this year and its CEO stepped down in September. Its stock has been languishing below $1 for long enough that the company has been notified it could be delisted from the New York Stock Exchange . And now the company has been forced to close 155 stores right before the crucial holiday sales period because of the dearth of credit available in the market right now.
For all intents and purposes, it appears the nation's second-largest electronics retailer is on the verge of disaster. Even if this season's sales results end up not being as bleak as some are predicting, it's unlikely even that could save Circuit City at this point. Circuit City did not respond to a request for comment for this article.
Though Wall Street analysts who watch Circuit City closest aren't ready to go on record to go on a death watch for the electronics chain, suffice it to say, its pulse is getting weaker and things aren't looking good.
The global credit crunch is hurting Circuit City in particular. The retailer buys TVs, stereos, laptops, and other gadgets on credit, usually at a good rate from vendors with the promise to pay it back once the company sells the goods in its stores. But as the company has racked up huge losses, vendors are not giving Circuit City reasonable financing rates. Though Circuit City hasn't come out and said so, some vendors could be convinced altogether that the retailer flat out won't be able to pay the money back and could decline to send Circuit City any products at all. At that point, it becomes almost impossible for Circuit City to operate.
Because of this, the business model of Circuit City and other electronics retailers doesn't work without very fast growth. And sales of many of the big-ticket items like notebooks, flat-panel TVs, and even gaming consoles , are tapering off.
No doubt, the slumping economy is causing some consumers to be more conservative about purchases this year. Consumers polled by the Consumer Electronics Association say they plan to spend $200 less this year than last on holiday items.
Add to that a fundamental shift in the way media is consumed--more online video and digital downloads, slowly moving away from packaged media and accompanying players--and the future of the electronics retail business doesn't look so bright. As prices drop , it gets harder to grow business. And without that growth, it's impossible for Circuit City to pay back those loans, much less suddenly become profitable, said one analyst who asked not to be quoted.
In the meantime, Circuit City is closing some stores and renegotiating lease terms on some of its store locations. Shutting the stores will save money in the long run, but the company needs cash and especially credit now.
Liquidating those stores, or selling all of the products in those stores at closeout prices to a liquidating company, should bring in some fast cash. However, Circuit City still has to pay the vendors for their product. Without some sort of margin on the liquidated product, it's unlikely the liquidation will have any immediate positive impact on the company's current financial plight. If the company doesn't bring in a decent profit this holiday, 2009 could bring about bankruptcy for the chain.
Circuit City is, of course, not alone in its struggle to keep up with the changing retail electronics business. Specialty electronics retailer Tweeter succumbed last week, and in early December last year--right in the midst of the crucial holiday season-- CompUSA announced it was closing up shop .
Buying a lot of products on credit up front means retailers are stuck with paying the bill even if consumers don't buy the products at the price they paid. As a result, retail isn't a particularly forgiving business for anyone even if they make one mistake, said Stephen Baker, who follows the retail electronics business for the NPD Group.
"The supply chain and the way go to market continues to reinvent itself. It puts more pressure on retailers," he said. "And they have the least flexibility and are culturally the most resistant to change."
Amanda Congdon calls herself a blogger, and after her arrival on the scene as the face of Rocketboom, it's easy to understand why she'd say that.
But when she left Rocketboom and subsequently began video blogging for ABCNews.com, she changed status, whether she believes it or not.
That's why there's a bit of a kerfuffle going on right now in light of revelations that even as she has been producing stories for ABCNews.com, she has also been performing in infomercials for DuPont, one of the largest companies in the world.
Asked about the apparent conflict of interest--staff journalists at most news organizations would likely be fired if such a thing was discovered--Congdon pointed me to a blog entry in which she not only didn't express any kind of regret for having done the DuPont work, but actually laughed about it.
"As I mentioned in my blog Sunday evening," her blog entry begins. "I made these little 'infotainmercials' for DuPont. I love how that ridiculous word spread like wildfire. That was my intention. A little experiment that WORKED."
Congdon went on to write that ABC had given her approval to do the DuPont spots--in which she touts products like the chemicals that protect firemen from raging heat--but that it didn't matter anyway because she's a blogger and "I am not subject to the 'rules' traditional journalists have to follow."
This would be fine and dandy to most people, I suspect. But by working for ABC News, even as a video blogger, I think she has become part of the world of journalism.
And so her next comment does not do her justice: "Isn't that what new media is all about? Breaking the rules? Setting our own? I see nothing wrong with doing commercials...As Sarah Silverman would say, 'I'd do it again.' In a heartbeat. Bring on the endorsements."
That attitude is more one of someone intent on being a performer, not a journalist. And while bloggers generally don't have to answer to anyone except themselves and, to some extent, their readers, Congdon is in a totally unique category: She is a blog-bred personality who has crossed over to the mainstream. If she was video blogging for ABC.com, that would be one thing. But her work appears on the news site, and that makes her part of the news team.
So, while she is a nice person, and seems to have good intentions, I think Congdon may well want to think about whether she wants a future in journalism. If not, then she's fine. But if she does, she may be burning bridges which she can't cross again.
SAN FRANCISCO--At an event here to show off Sony's long-awaited new game console, the PlayStation 3, Kaz Hirai, president and chief executive of Sony Computer Entertainment of America, announced the launch titles.
And it's good news for gamers: The PS3 will hit stores Nov. 17 with 22 titles, including games from all leading publishers, such as Electronic Arts.
Among the titles are "Madden NFL '07" and the skateboarding favorite "Tony Hawk's Project 8." Sony fans have been concerned about developer support for PS3, but the roster of launch titles exceeds even Xbox 360's large roster of launch titles.
Sony said its first-party titles will cost $59.99. It also showed off a wireless controller, which will cost $49.99 and will have a 20-meter range and 30 hours of battery life, not to mention motion sensors.
Twing is launching a new site on Tuesday where you can find out what people have written about specific topics in forums and other online communities.
The site shows search results for keywords in individual posts, topics, and whole forums and allows a lot of fine tuning for results. You can choose to include or exclude specific terms and filter so you only see items in a certain time frame, items from certain sources, or those that mention specific people or companies.
Twing searches the Web for sites and allows forum owners to submit their sites to the directory. It also shows you what topics and forums are hot, listing which are the fastest growing and most active communities.
Other message board and forum search sites include BoardReader.com , BoardTracker.com , and Omgili.com .Twing lets you use keywords to search by post, topic, or forum across a variety of message boards and online communities.
Interesting column today from Siddharth Srivastava:
"The dynamics of the way the outsourcing business is being conducted is changing. Faced with rising business from the West, spiraling salaries of high cost employees who constantly hop jobs as well as a predicted shortage of skilled workers, Indian IT firms are doing the next best thing ?? outsourcing outsourced work from the U.S. to China."
Until now, India's reaped the biggest benefit from outsourcing. But when it comes to transnational economic forces nothing's etched in stone. The Chinese economy is growing by leaps and bounds and yes, they also know a little something about high-tech, thank you. What's more, the work force, which can meet -- and beat -- India on cost, is the largest in the world. And they increasingly speak English.
The unanswered question has to do with the future direction of China's government. On the one hand, the ruling Communist party clings to the command-control power structure that has existed since 1949. On the other, it's been encouraging the proliferation of business since Deng Xiaoping took over following Mao's death.
But can the old guard hang on if a swelling capitalist class begins to demand more political freedoms? So far, the answer is yes but nobody can safely predict what the terrain might look like in another ten years.Charles is an executive editor with CNET News. He has covered technology and business for more than 25 years. A graduate of Queens College and Columbia University, Cooper began his career in journalism at the Associated Press before moving to technology coverage. Before joining CNET News, he worked at Computer & Software News , Computer Shopper , PC Week , and ZDNet. He received the Excellence in Journalism award from the Northern California branch of the Society for Professional Journalists for column writing. In addition to his blogging and podcast appearances, he is a co-host of the CNET News Daily Debrief. E-mail Charlie .
Cingular Wireless is hoping to you are. And, more importantly, they're hoping you're willing it show it - but just don't violate their pending patents in the process.
The cellular carrier has applied to the U.S. Patent & Trademark Office for patents to its emoticons technology . Cingular is hoping to dish up an easy way for users to transmit these little faces when sending a text, via a designated keypad to touch-screen like feature.
Emoticons are little cartoon drawings of faces, used to express an emotion when users are writing an e-mail, IM or engaged in an online discussion with others. A good example of eomoticon faces accompanies a recent article in Cellular-news .
So, how are you feeling today?Dawn Kawamoto covers enterprise security and financial news relating to technology for CNET News. E-mail Dawn .
Before, the company was grouped around products: PC parts; chips for communication devices; etc.
While the new structure may help the company better target customers, it's a downer for those who follow the financial success or failure of the different product groups. Before, you could see how much the communications group lost, or how much money the company made from PC components.
Now, Intel only shows the revenue by product categories: microprocessor, which includes PC processors and processors for embedded systems , flash and other products .Topics: Processors Bookmark: Digg Del.icio.us Reddit cnet_news406:http://news.cnet.com/8301-10784_3-5677007-7.html