As you probably already know Circuit City filed for bankruptcy protection. They owe Nikon $14,926,445...
Perhaps they’ll drop some of their prices to help clear them of that debt? If they do, I won’t mind helping relieve them of their equipment debt 😀
That’s up to a $15Million write-down on receivables for Nikon. That’s a spicy meatball.
More consumer chains likely to be hurt next year with big slump in sales. The makers better be careful with inventory and pushing shipments to dealers.
Wouldn’t Nikon take the stock back if the payments could not be made?
they have likely already sold some of it.
Curiously, Canon not among big unsecured creditors. Sony, Oly, Panny, Samsung all there with Nikon.
How do the owe more to Olympus than Nikon? Thats odd
That’s unsecured credits. Note that Canon is not among creditors, which would be even stranger.
Yeah, but it is a Chapter 11 bankruptcy, which is very different that a Chapter 7. In Chapter 11, it is simply a reorganization of debt, not a release of debt. As long as they stay in Chapter 11, Nikon will get its money, it just might take a little longer than they agreed to. If they move on to Chapter 7, then we can starting talking about this.
When I first saw that $ figure I thought it was $14,926 – the price of the new MX body.
I don’t get it. Circuit City is not known to be a big seller of Nikon, especially for their high priced items like pro level cameras and lenses. In other words, they sell a lot of D40/x/60 to D80s and some basic lenses. I can imagine they sell many more Canon 400D/450D in the DSLR section than anything else. On top of that, they sell tons of compacts which Canon and Sony has dominance. Why Nikon stuck with a 14 million dollar IOU but not Canon?
The relevant word is “unsecured” credit.
well, it doesn’t take that many $2000 + dslrs over a national chain to add up to $14m. Also, I suspect that CC sold plenty Nikon CoolPixes too.
Canon probably sold their stuff to CC through a distributor of some kind, the debt will be there but under a different name and ultimately Canon will likely hold the credit risk for such a large account.
But another posibilty is that Canon decided to stop extending credit to CC after they earlier made a series of moves that were widely considered warning signs. I wish I had followed through and shorted the stock when I heard that the management were sacking all the best salespeople and giving themselves huge bonuses. I thought they were headed for bankruptcy at the time.
This is what Nikon gets for supporting crap chains like Circuit City instead of giving greater support to CAMERA stores.
Circuit City has been having financial difficulties for a long time. Nikon should have begun holding back stock, but I bet the sales people didn’t want to lose the sales volume. Sales people never care about the potential write-down – that’s just a financial and bookkeeping thing to them.
Agreed. My favorite camera store, Camera World in Charlotte, NC, barely keeps any Nikon gear in stock except for the base models, and is not permitted to sell the D3 at all, even if the customer were to special order it and pay in advance. The salespeople there tell me Nikon bases these decisions entirely on sales volume; obviously CC does (did?) more volume than a small PROFESSIONAL camera store, but I assure you the people at Camera World NC know what they are selling (unlike the typical big box clerks) and Camera World NC has customers who can and do buy expensive equipment.
By the way, Camera World of Oregon, now a part of Ritz Camera, is not in any way affiliated with the Camera World in Charlotte.
Why on earth would Nikon allow such a debt to mount up. It doesnt make sense to me, surely a retailer would not have a credit limit in excess if $14m.
That actually isn’t an unreasonable amount of debt for the amount of product. When you think that it has expensive DSLRs and point and shoots it is really not a lot of cameras. Also, like many retailers now the product is never actually owned by the store. It is placed on credit and when it is sold it is immediately repaid. It is just how things are done.
$14 million is nothing. With 1500 stores, that’s $9333 per store or about 18 $500 wholesale purchases per store. This could be one month’s worth of orders.
Nikon was probably already being careful.
As far as bargains are concerned, there usually aren’t any because people are idiots. They rush in and buy everything decent up at the first sale even though prices are still higher than the competitors. A true bargain for me would be 20% below what a J&R or B&H charges.
While this is a tough environment for all physical retail and even before the economy sunk, retailers like Circuit City were suffering because of the changing marketplace, poor music sales, disinterest in hi-fi, e-commerce, etc., this was an incredibly badly run operation in which once again, a series of vastly over-paid executives displayed complete incompetency and now 34,000 employees are going to suffer. But I guarantee you that the senior executives will all be very well compensated.
When will physical retail learn that in the age of e-commerce, you have to have value add? Circuit City had none. They purposely fired their most experienced employees, took away sales commissions (which is both a positive and a negative), had ugly stores in undesirable locations, not particularly great prices poor customer service, mostly poorly designed sales displays and boring stock. I was shopping in one once when the cash registers at both checkout lines (only two checkout lines in a 50,000 square ft store?) broke down and the cashiers and managers simply walked away and left us standing there. Another time they told me after I waited on a checkout line for 30 minutes, “oh sorry, this line doesn’t take credit cards.” This is not a recipe for success. I never shopped there again.
Went to a Circuit City going out of business sale a couple days ago. Absolutely no Nikon products available except for some demos and two returned (repackaged) 55-200 VR’s. Wonder if Nikon USA forced them to send back any valuable stock…
Of course the place was sloppy with Sony, Canon, and Olympus stuff… at 30% off…
Pingback: Not again | Nikon Rumors()
Enter your email for daily blog updates: