GearWERKZ TechBlog

No, this is not a celebratory high-five article about Obama winning the presidency, though I have no problem with that particular event. Interestingly enough Mama Zeux and I talked a good bit throughout the election. In a conversation since then, she queried me on a few events in the news and I had to break it to her: while I was content to keep up with the presidential race, I truly never watched the news, as most of the topics pumped out by the standard media are depressing.

Follow up:

One of the ongoing depressing topics is the state of the economy. Every other story is one about another business in trouble or some investor loosing their shirt (or house) in an ongoing Wall Street or mortgage house drama. But rejoice. There is some cheer to be found in the dark, or more specifically in the black. Specifically the black of the Friday after Thanksgiving.

Already beginning to trickle out are the news and tear sheets broadcasting the good deals that are to be found the day after you consume vast amounts of turkey…or whatever your chosen delicacy is for that day. The first player to kick-start this dynamic in the market was Circuit City. With news of the impending closing of 155 stores, some people began casing their local stores to get indications of any impending fire sales. The official word from the corporate HQ of CC was that there would be no liquidation of store inventory, other than items they just wanted to get rid of anyway due to supercession by new models, and so forth. Stores targeted for closing would bar the door and commence shifting inventory to the stores that would be remaining open. No holiday cheer to be had here.

Then, a few days later, the initial, somewhat prideful boast, was countered by the company then announcing that they had actually filed for Chapter 11 Bankruptcy. All of a sudden the optimistic outlooks previously promulgated looked like a desperate attempt to retain share value that was already taking a beating on the NYSE. This was coupled with a few posts I came across on my usual forums indicating that members had happened by their own local CC’s that were targeted for closure and reported a larger volume of products than normal with slashed prices.

These initial reports indicated a lot of stuff on sale, but not necessarily a lot of good stuff, and not necessarily at good prices. A typical tactic of retail stores, especially in the electronics industry, is to first mark items intended for sale up to MSRP, and then take the obligatory 10 or 20% off the sale price, which in many cases just sets the price within dollars of what they normally sell the device, if it is normally priced below retail.

But the secondary round of CC news, about the bankruptcy, has led many in the media, me included, to recommend keeping a sharp eye on your local CC; sharper if it is targeted for closure. All of that pride in the first press release may have been just that. Whether it is or not, CC is on a sharply angled downgrade that may very well yaw into a gaping maw of a precipice that we may all benefit from.

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