Demise seen as sad but not surprising

Circuit City Stores Inc.'s liquidation announcement will affect thousands of employees and other businesses.

Communities far beyond the Richmond area will feel the impact.

Here are reactions from some of those affected:

Employees

For Circuit City employees across the country, the liquidation means losing a job during an economic recession.

"I just recently graduated from college, and there are not a lot of jobs out there," said Timmy Clegg, 23, who has worked at a Circuit City store in Phillipsburg, N.J., for five years.

Clegg thinks the company's decision to lay off 3,400 of its higher-paid store workers in 2007 was the biggest signal of its eventual demise.

"Layoffs are expected with any company -- that is reality," he said. "But at the same time, there was no rhyme or reason for it. They were the most experienced people. They knew the most about the products."

The job cuts and the decline in sales took a toll on store staff, he said. "The overall morale for the past year has been downhill," he said.

Caleb Gwozdz, an employee at a Circuit City in Albany, N.Y., said he is in college and has depended on his income to pay rent and expenses.

"The severance pay they are talking about is nothing to write home about," he said. "It is sad that 30,000 people are going to be out of a job."

Employees weren't talking at Circuit City's corporate headquarters in Henrico County yesterday. They walked briskly to their cars in the bitter cold and brushed off questions about the decision to liquidate.

"We're fine," said one man without breaking his stride.

Others sounded less sure. Asked if he worked for Circuit City, one man answered, "Not any more" as he got into his vehicle.

Employees also weren't taking questions at Circuit City's store on West Broad Street at Gaskins Road. "I don't want to bring down the morale of my team," store manager Jamekeya Myles said.

Myles said she and her staff of about 55 employees learned of the decision when they came to work yesterday. "It wasn't a huge surprise."

Customer

Peter Mulroney of Richmond went to Circuit City's store at West Broad Street and Gaskins Road to exchange a telephone system last night. He said he has many friends who worked for the company and has shopped at its stores for years.

"I guess it's been a long time coming. I wasn't surprised to see it in the headlines," he said.

Vendors

"This one's going to make Richmond hurt," said Edward Gooding, president of the technology services company The Merge Computer Group Inc. in Henrico. "We kept hoping they would turn it around and pull out of it. We were hoping to ride it back up with them."

Gooding runs a technology-outsourcing company that provides workers for project management, business analysis and other consulting. Circuit City had been a customer for 18 years, at times employing 28 Merge consultants.

The number decreased over the years, and Gooding had three people working for Circuit City when the company filed for bankruptcy protection in November.

His company is owed $110,000 by Circuit City. "If I get pennies on the dollar, I guess that would be nice, but I'm not counting on it," he said.

Industry

Kenneth M. Gassman Jr., who had followed Circuit City for 20 years until 2001 as a retail analyst for Davenport & Co. and Wheat First Securities (now Wachovia Securities) in Richmond, said the typical life cycle of a retailer is 35 years to 50 years. Circuit City was created nearly 60 years ago.

"They lasted longer than most retailers, and they had a long successful run," he said.

Circuit City, along with defunct catalog showroom retailer Best Products and former home furnishings giant Heilig-Meyers, help put the Richmond region on the retailing map.

"They were retail stalwarts. Circuit City, like Best Products and Heilig-Meyers before them, peaked and then spiraled into a financial abyss of bankruptcy in which there is no return," Gassman said.

Gary Shapiro, president and chief executive of the Consumer Electronics Association, a trade group based in Northern Virginia that represents manufacturers, retailers and others related to the consumer-electronics industry, was dismayed by Circuit City's demise.

"But it was no surprise," he said. "No one has ever come back from a descent that deep. In consumer-electronics retailing, when you file for Chapter 11, it is short step to Chapter 7 [liquidation]. It is very difficult for Richmond and the industry and consumers and employees. It is pretty harsh."

Colin A. McGranahan, an analyst with Sanford C. Bernstein & Co. Inc. brokerage in New York, described Circuit City's death as "an end of a great era."

"They were the dominant consumer-electronics retailer for years, but they made some strategic mistakes and tactical errors along the way. And they were in one of the most difficult sectors in retail and went up against one of the most impressive competitors [Best Buy] that you could ever face."

Politicians

General Assembly members from Henrico also expressed sadness over the loss of a hometown company, and the jobs and business that will be affected.

"For Richmonders who have watched Circuit City grow into a national chain, it's like the death of a child. It just breaks your heart. It breaks your heart for all the employees, all the suppliers, all the vendors," said Del. Jimmie Massie, R-Henrico.

"My heart goes out to the employees. Everyone in my district knows somebody who has lost a job, or has lost a job. This creates more of an incentive to work harder in this session to make sure we have a tax policy that encourages job creation," said Del. William R. Janis, R-Henrico.

"This reinforces our need to focus on economic development in the Richmond area and Virginia," said Del. John M. O'Bannon III, R-Henrico.

Staff writers John Reid Blackwell, Emily C. Dooley, Michael Martz, Tyler Whitley, Olympia Meola and Melodie N. Martin and Deputy Business Editor Gregory J. Gilligan contributed to this report.