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Circuit City Can Make You Rich

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Farewell, Circuit City!

The consumer electronics superstore closed for good yesterday. The liquidators hired to clear out the 567 stores finished up the CSI work, taking pennies on the dollar for the merchandise still there.

I stopped by my local store on Saturday afternoon. Curiosity -- and a chance at a freakishly good deal -- got the better of me. I walked away empty-handed, as the cavernous electronics retailing empire was reduced to only a handful of bins by the entrance selling mostly obscure hip-hop CDs, orphaned remote controls, and store fixtures.

As an investor, I quickly took note of the items that weren't moving despite being marked down by 70% to 90%.

  • There were two entire crates of Xpress-EZ receivers for Sirius XM Radio (Nasdaq: SIRI  ) reception, marked down to $7. I took a pic to prove it.
  • A running joke among those scouting Circuit City for celluloid was that you could find any DVD you wanted, as long as it was Hancock. Well, Will Smith can rest easy. The only DVD in the entire store was a copy of Step Up 2: The Streets. Unfortunately, there were more than a thousand CDs that couldn't find takers, even priced at $2 or less.
  • No video games were available, but there were more than a few generic PC games, some antivirus software, and several copies of premium tax-filing programs. We're talking about the copies that cost $20 more because they include state filing. Did I mention that I'm in Florida, where most residents don't have to worry about that? I'll blame Circuit City's purchasing department for that lapse.

Naturally, Circuit City's shuttering of hundreds of stores over the weekend is an opportunity for its competitors. The primary beneficiary will be superstore rival Best Buy (NYSE: BBY  ) , but that's a foregone conclusion. Best Buy's stock may have shed 9% of its value since Circuit City unveiled its liquidation plans two months ago, but the S&P 500 has surrendered nearly 20% of its value in that time.

Keep an eye on Best Buy, of course, but also consider the smaller box concepts like RadioShack (NYSE: RSH  ) and regional chains like Hastings Entertainment (Nasdaq: HAST  ) , Conn's (Nasdaq: CONN  ) , and hhgregg (NYSE: HGG  ) . They will also collect their share of the Circuit City dollar.

One chain's doors sadly close. Other doors open. It is how Mr. Market works.

Other ways to see more than just the red in the Circuit City logo:

The Fool owns shares of Best Buy, which is a Motley Fool Inside Value selection and a Motley Fool Stock Advisor pick. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz will miss Circuit City. Sort of. He doesn't own shares in any of the stocks in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (11) | Recommend This Article (16)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 09, 2009, at 11:05 AM, asm610 wrote:


    I really hope you cut the crap with SIRIUS already! your exuberance to bash the lied.....there are 2 crates photographed, but only one with receivers in it....which would amount to 15-20 units. I hope you sleep well at night knowing how you and others have screwed thousands of investors of SIRIUS out of their chance to watch their investment come to fruition with your fear mongering and scare tactics. I can only say I hope you are being paid well to bash SIRIUS...and save your money, because sooner rather than and your company will be involved ina lawsuit doing things like this! Totallly irresponsible journalism on your part....jut when I thought you were starting to recognize the error of your ways and become more responsible as a writer!

  • Report this Comment On March 09, 2009, at 12:18 PM, duckdogers wrote:

    Anyone ...and I mean anyone who is slamming SIRIUS is an ex-XM share holder who thought the deal should have went the other way. XM buying SIRIUS. Well "Fools", it did not go that way and now your petulance is doing the very thing to "all SIRIUS/XM share holders that happened to you. Thanks for all of your good works. Howard is gunna get his money. I hope you "experts" and pundits are working for us to get ours. NOT.

  • Report this Comment On March 09, 2009, at 12:36 PM, Krattzz wrote:

    SIRI/XM is the greatest $12 dollars a month I spend. So you can bash it all you want but people like you were saying the same thing when cable came out..."why would you pay for something you can get for free".

    This company will be viable and turn a profit next year and in 2012 be streaming video into the minivans of the TV's that kids watch in the back seats. So be a thinker and not a basher as it's easy to make assumptions but harder to be a visionary.

  • Report this Comment On March 09, 2009, at 1:11 PM, chris2504801 wrote:

    It's too bad that people lost their jobs, but its not a surprise to see this happen. Whenever i'd go into Circuit City, Best Buy, etc.. the prices are always way higher than if you buy the same thing online. Often i'll go into the store, check out a product, and then buy it from Amazon and save 25-50% .. I've been using this site to find some good deals online:

  • Report this Comment On March 09, 2009, at 2:53 PM, TMFBreakerRick wrote:

    asm610, that was just one of the two crates at The Greenery Mall in Miami. The other was about 15 yards away with the music CDs.

    And I don't think anyone is under any delusion that Sirius XM is working at the retail level. Its growth is coming from new car sales.

    And I trust you know that I was one of the few who stood up for Sirius XM earlier this year when I predicted that company would NOT file for bankruptcy in February. I remain a subscriber to both and love the product. I just hate the balance sheet and the income statements.

  • Report this Comment On March 09, 2009, at 3:29 PM, asm610 wrote:


    My apologies then! I am just really tired of reading all the BULL with regard to SIRIUS even when something positive know as I do that it is usually spun to look as negative as possible. I don't love the balance sheet yet either...but it will get there. Your photograhping of the XM players...and inclusion of SIRIUS in this article was to me a bit underhanded....but I digress. As to the growth from cars..that is what needs to change...other avenues need to be added....and I think we have seen the beginning of this.

  • Report this Comment On March 09, 2009, at 3:47 PM, mikecart1 wrote:

    I got nothing to add except that I'm heading to Circuit City after work. Peace. :)

  • Report this Comment On March 09, 2009, at 5:46 PM, bzhing wrote:

    what is the point of this post?

  • Report this Comment On March 09, 2009, at 11:17 PM, joehot wrote:

    Hey Krattzz

    Educate me. How soon will internet radio kill the industry. I mean, have you listened too it. Soon enough it will be in the car, I'm sure.

  • Report this Comment On March 10, 2009, at 3:44 AM, Oldraspy wrote:


    Already is for those with smartphones...

  • Report this Comment On March 10, 2009, at 12:04 PM, Rally4893 wrote:

    You are the exact type of FOOL that the liquidation company wants. Uninformed and not knowing the difference between a true bargain and a perceived one. If you did your shopping ahead of time, you would know that SiriusXM is offering the ExpressEZ for $9.99. $7 a great deal? Only if you are buying a back up or want the accessories as an extra. You'll probably see these pop up on ebay for $0.01 "Buy it Now" with $20.00 shipping in the next few weeks.

    This liquidation company has been fleecing the public on just about every store closing over the past 5 years by marking up the merchandice to full retail+, then slowly dropping the price until there is nothing left. Pennies on the dollar? Yeah, maybe 110 pennies on the dollar.

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