Circuit City to shut down

[Dan J 277]

NEW YORK (CNNMoney.com) -- 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 Marcum, 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/compa...sion=2009011611

[DeadPoolX 9]

Wait a sec. I thought Circuit City was already out of business... or was that CompUSA? Ah, well. It's been years since I went to either.

[Dan J 277]

Wait a sec. I thought Circuit City was already out of business... or was that CompUSA? Ah, well. It's been years since I went to either.

CompUSA is already out of business. Circuit city started closing stores recently.

[mawilson 2,133]

Are you A.J.?

[*JG* 2]

I always liked that store. Saddened.

[almaty 19]

same here..

[Nagishkaw 510]

I've never been in it.

[almaty 19]

see title..it is all your fault, sister mocassin...

[Trumplestiltskin 5,791]

Circuit City didn't have a very good brand. They didn't have the same level of inventory as Best Buy and was comparatively overpriced.

I think the only thing I've ever bought from there is a camera case.

[Niels Bohr 72]

I rarely shop at Best Buy and Circuit City. My primary store is Newegg, and online store that provides lower costs electronics and computers to consumers.

For misc. items like USB cables that I need right away, I shop at WalMart.

Knowing that Circuit City is out of business, I'll plan to go and buy alot of liquidated items. But, I doubt that'll get something good.

[Trumplestiltskin 5,791]

I rarely shop at Best Buy and Circuit City. My primary store is Newegg, and online store that provides lower costs electronics and computers to consumers.

For misc. items like USB cables that I need right away, I shop at WalMart.

Knowing that Circuit City is out of business, I'll plan to go and buy alot of liquidated items. But, I doubt that'll get something good.

That sucks about those sales - you rarely ever find anything you actually want, at a price that would be a considered "a bargain".

[one...two...tree 2,762]

Oh man...

[Trumplestiltskin 5,791]

Nah its not that sad - another crappy store that won't be getting my money. Best Buy should go the same way (but won't). Overpriced and they try to rip you off with extended warranties whenever you buy electronics.

[GiGii 4]

Ahh- their site is already down.

http://www.circuitcity.com/closed.html

However it states they'll be back with new products soon!

[Jasman0717 8]

Wow, I was just talking to a financial adviser yesterday and he thought Circuit City was on its way back......you can bet I won't be taking finanical advice from him