Blockbuster Looks At Circuit City's Books; Ditches Acquisition Offer

from the no-real-surprise dept

We were one of a very small number of people who actually saw some logic behind Blockbuster bidding for Circuit City -- though, it seemed unlikely that Blockbuster viewed the purchase in the same way we did. Most people assumed (probably correctly) that Blockbuster didn't really have much of a plan at all, other than to merge the two struggling companies and have an even bigger mess on their hands. Blockbuster has now withdrawn the offer to buy Circuit City, gamely claiming that it has to do with "market conditions" and a better understanding of just how awful Circuit City's books appear to be. That's press release talk. What's more likely is that Blockbuster realized that everyone was right: it would screw up the merger and make a bad situation worse.

Filed Under: mergers, retail
Companies: blockbuster, circuit city

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  1. identicon
    nonuser, 2 Jul 2008 @ 6:32pm

    really didn't make any sense

    I could see where they might do some hand wringing about not being able to sell the TV sets and game consoles, but that is just a completely different business with little overlap in expertise. And with Circuit City being hit by the triple whammy of the recession, weak dollar vis supplier countries, and rising fuel prices for transportation, the timing is bad as well.

    Blockbuster does have a nice niche, that is group media shopping by dormmates and apartment mates in their 20's and 30's. One obvious area for extension would be audio recordings, but of course that whole industry has pretty much gone kaput. Maybe they should sell used CD's for below $10, that would have the low cost, opportunistic shopping aspect that fits in with the rest of their experience.

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