Of Insolvency and Solidarity

by SixFigureStart | June 16, 2009

  • My Vault
Yesterday saw the closing of another major business for New York, the Virgin Megastore in Union Square. Virgin was perhaps the largest shop of the city for media goods such as CDs and DVDs, and along with the Times Square location (which shuttered back in April) was one of many flashier businesses that represented the “New” New York that Rudy Giuliani likes to take credit for. But like peers such as Tower Records and former Union Square neighbor Circuit City, now Virgin too has followed that same long march to the grave known as the Going Out Of Business Sale.

Such termination events are at once an ominous portent and a small blessing during this harsh economic climate. On the one hand, this is one more “big box” that couldn’t sustain itself, a sign that we’re still not out of the woods and signaling another impending flood of unemployment claims and job seekers in an already crowded market. But at the same time, the rest of us can benefit from these closeout sales as our budgets have been tightened past the point where we’d normally allowing such luxuries. So you finally have an excuse to pick up that new Depeche Mode album.

But there are two lessons to keep in mind when taking advantage of these sales. The first is to keep your wits about you: Most of those big discounts are, in fact, not. Consumer groups warn that there’s not much saving to be had at closing sales, at least not in the first few weeks. Major chains employ “liquidation specialists” to provide strategies on turning a profit from bankruptcy, primarily for slashing prices. The trick is to mark up before marking down: normally items at major stores are already discounted from the suggested retail price; but when these “sales” start, the sticker is immediately raised back to the retail price, while the store advertises a discount of 10 to 20 percent off that. So don’t let the numbers fool you.

The second (and more vital) lesson is remembering your fellow wage slave. As a shopper it’s easy to get caught up in a “Customer is always right” mentality, especially when financial and career woes have most of us feeling like the world owes us a living. But somehow these store closings tend to bring out the worst in consumers. Take, for example, a recent This American Life episode, entitled “Scenes from a Recession,” which not only provided glimpses at government takeovers of bad banks and recent surges of dental maladies, but at the recent Circuit City store closings. While being interviewed for his perspective during the final liquidation sale, one store associate vented his frustrations thusly:

”I really don’t know where the anger comes from. I’m sorry I can’t sell you a GPS for 70 percent off. I’m sorry we don’t have any Weeds. I’m sorry I can’t sell you that flatscreen TV for $300. I’m sorry I can’t take your check or Circuit City credit card as a payment. I’m sorry. I was simply a car stereo installer. I’m doing the best I can to help you. If my best isn’t enough, I’m sorry.”

If that doesn’t get you choked up a bit, you’ve either never worked retail or laughed when Bambi’s mother was shot.

Other employees went on to express their own ire over customers’ attitudes, the disheartening depletion of whole sections, their sentiments towards the company (“I now view Circuit City as a sickly old relative who you just want to die, so the suffering can stop,”) and recount some of their most loathed phrases heard during the closing. “That’s why you’re going out of business,” was a phrase often sneered by unsatisfied shoppers, as a catch-all attempt at clever rebuke. Granted, perhaps the employees may not have been operating at a hundred percent; knowing they would be unemployed in a matter of days had most feeling like the walking dead. One concluded, almost pleadingly, “We’re not bad people here. We’re just tired and beaten.” Remember that the next time you’re at a store closing, and ask yourself whether it might apply to your own personal and professional concerns these days.

--Alex Tuttle, Vault Web Content Intern

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