Wow...I guess some good deals will come out of this but it is sad...
Bankrupt electronics retailer Circuit City Inc. said Friday it has asked for court approval to close its remaining 567 U.S. stores and sell all its merchandise.
The company said it has 34,000 employees.
"We are extremely disappointed by this outcome," James Mar , acting CEO for Circuit City, said in a statement. "We were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company."
In a filing with the U.S. Bankruptcy Court for the Eastern District of Virginia, Circuit City - the No. 2 electronics retailer after Best Buy (BBY, Fortune 500) - said it had reached an agreement with four companies to start the liquidation process.
The company said the sale would begin Saturday and run until March 31, pending court approval.
The retailer's Web site and call center will cease to operate after Jan. 18.
Circuit City said employees will receive 60 days notice of the termination.
Employees who are laid off earlier will get pay and benefits for the 60-day period beginning Friday, the retailer said.
Those who remain with the company to assist with the liquidation, will receive pay and benefits.
Circuit City also operates about 765 retail stores and dealer outlets in Canada. The company said its Canadian operations, which employ 3,000 workers, will continue to operate.
The company said it will redeem its gift cards through the liquidation sale, but the cards will have no value once the stores are closed.
"This is very significant. It shows you how bad things are for the the retail industry," said George Whalin, president and CEO of Retail Management Consultants.
Whalin said management mistakes over the past few years combined with the recession brought down Circuit City.
"This company made massive mistakes," he said, citing a decision to get rid of sales people and other mismanagement.
What's more, given the credit market freeze, Whalin added that no manufacturer wants to sell to any retailer who doesn't have money to pay for the merchandise.
At the same time, Whalin said there's still a very slim chance that one or more firms that have expressed an interest in buying Circuit City could still buy it out of bankruptcy over the next few days.
"I wouldn't say it's completely over yet for Circuit City, but it's almost over," Whalin said.
Love Goel, CEO of Growth Ventures Group, an investment banking firm focused on retailers, agreed with Whalin.
"Circuit City isn't a viable business in its old incarnation when half of electronics sales have moved online," Goel said. "CompUSA and Tweeter also didn't make it for the same reason."
However, Goel speculated that Circuit City could still find a lifeline if Golden Gate Capital, one of the reported lead bidders for the merchant, bought the company and restructured it primarily as an online business with very few physical stores.
"This would eliminate overhead costs, vendor conflicts and other issues," he said. "Circuit City has an almost $1 billion online business. So there is a future for it in that regard."
http://money.cnn.com/2009/01/16/news...ion=2009011611
Wow...I guess some good deals will come out of this but it is sad...
It really sucks for the 34,000 people losing their crappy dead-end jobs who'll be forced to go look for another crappy dead-end job.
I used to think Cicuict City was the until my town got a Best Buy.
Tiem to look for deals...
I guess it's time to go look for that desktop I've been wanting.
Sucks... I liked CC.
CC had some of the worst customer service I've ever seen. About damn time it went out of business.
Scary thing is that you never seem to find any real electronics deals in these liquidations. Maybe it'll be different this time.
not if COMPUSA's "sales" were any indication.
And me with a little disposable income...
Hmmm...
The bad news: Circuit City—the number two electronics dealer behind Best Buy—is shutting down all operations in the U.S. The silver lining: If you're looking to grab a good deal on electronics, Circuit City's liquidation sale starts this Saturday and runs through March 31 (pending court approval of their bankruptcy filing). The catch: According to Gizmodo, prices may go up to MSRP on Saturday, meaning the whole "sale" part of the liquidation sale isn't exactly accurate. Those prices may drop drastically between now and the March 31 close, so it'll be worth keeping an eye on.
Time to get my BluRay
Wow. I didn't much care for Circuit City, but another 34,000 jobs down the drain right now ain't good to see.
! Even with liquidation prices, Circuit City's merchandise will still be retail cost.
Their prices are ridiculous.
Now who will give best buy a run for it's money?.... who!?
Walmart will bankrupt them, too, soon enough.
They certainly won't be the last to go. Retail is gonna take a huge hit this year and only the strongest will survive. One of the big issues is credit. The overseas suppliers won't ship product without payment guarantees and these marginal companies can't get the credit lines.
The next real estate mess will be in commercial retail/shopping centers...as these stores close the half empty malls will start to default on their loans...
Sucks. I liked them way better than ing Best Buy, who would hound you to buy a service plan if you bought so much as a Coke.
That's just part of the fun.
One of my favorite lines to use is "What ING part of NO didn't you understand?"
That's a slam dunk at Best Buy...LOL
ing extended warranty on my plasma!
aw, some good news, for me at least
Are Circuit City's extended warranties affected by the liquidation?
No. Circuit City Advantage Protection Plans® (extended warranties) have been backed by third-party independent companies for more than 15 years and as a result, are not impacted by Circuit City's closing.
Currently, all Circuit City Advantage Protection Plans are fully backed by the Assurant Solutions companies. Assurant Solutions operates as Federal Warranty Service Corporation, Sureway, Inc., and United Service Protection, Inc. Assurant Solutions is part of Assurant, Inc. (NYSE: AIZ), and its extended service contacts are backed by an Assurant insurance subsidiary rated A "Excellent" by A.M. Best Co.
I'll check them out in February to see if I can get some good deals.
Hmm... I've always wanted a DSLR...
Anyone been in Crossroads Mall lately? As someone who went to Wonderland as a child, it is sad to see.
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