Circuit City Starts Going-Out-of-Business Sales

January 16, 2009 11:53:07 PM PST
Fresno's retail landscape is changing quickly. Circuit City filed bankruptcy two months ago, and is now shutting down. Gottschalks just filed bankruptcy and is trying to survive. It means more empty buildings and less choice for consumers. Circuit City is the number two electronics retailer in the nation. Retail analysts say the loss of Circuit City will steer consumers to number one Best Buy, and the result could be possibly, higher prices in a less competitive market.

"People do not have that same kind of ability to compare prices, compare varieties of products. " Says Marketing Professor Bill Rice of Fresno State. He adds, "That means people who have similar kind of product mixes have more flexibility in how they price and how they decide what they want to carry."

Circuit City will soon join Mervyn's in leaving empty retail buildings in Fresno. But John Marshall, a commercial real estate agent who specializes in shopping malls doesn't believe the locations will stay vacant. "They're locations where people are used to shopping and they will continue to be." Marshall says.

With Gottschalks now in bankruptcy, there's also the potential for some or all of their stores to be vacant. Marshall believes those locations would likely find new tenants as well. Marshall says, believe it or not, other retailers still have their eyes on this market. "There are not as many. They are not as aggressive, but there are still chains looking at coming into the area or adding to stores they already have." Marshall says.

Both Marshall and Rice agree it is too early to say what will happen with Gottschalks. Both feel the 104 year old company has a chance at surviving, in some fashion.

"It's whether or not they have enough time, momentum and energy to do that. And I think if they do that they will survive, if they don't, its kind of like Circuit City." Rice says.

Gottschalks goes on the auction block in mid-March if it can't find new financial backing. Circuit City plans to close it's doors at the end of March.

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