Circuit City to shut down

[Cash_thatswhatiwant]

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.

Circuit City said employees will receive 60 days notice of the termination. 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.

"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." To top of page
http://money.cnn.com/2009/01/16/news/companies/circuit_city/">Source

ALL MUST GO SALES, hopefully? :shrug:

[Bluebear]

1. 34,000 more unemployed.

:(

[mdmc]

2. didn't some du'er get arrested there last year for refusing to allow

his bags to be searched?

big box destroyed the gallerias
gallerias destroyed the malls
the malls destroyed the strip mall
the strip mall destroyed main street
main street destroyed mom and pop ops

And now the internet destroys the box stores...

Watch... Mom&Pop Main Street USA will destroy the internet.. We crave connection...

[DJ13]

3. Online only wont work

Their success online is due to the advantage they had over traditional online retailers by offering buy it now on their website and pickup in the store.

[Rebubula]

4. That sucks

That sucks for jobs...but Circuit City has sucked for some time.

The Internet will be the eventual downfall of many businesses. The world, it is a-changin and business will need to adapt.

We will survive.

[lapfog_1]

5. Buying things like video or sound systems...

one really wants to comparison shop.

The internet cannot do that.

You can read all the reviews you like and still not know if the big new flat panel monitor is the one you want until you see it for yourself.

[doc03]

6. They put the final nail in their coffin when they

fired all their experienced employees a while back and hired new minimum wage people. The only way to compete with Walmart is with superior service. I bought a TV last week and shopped everywhere but ended up buying it at Walmart even though I hate the place. I didn't buy at Circuit City since I figured it would go under, Best Buy and Sears prices are high and their employees are no better.
Sears really sucks anymore whatever you buy is in the warehouse in Pittsburgh (60 miles from here) and same with service they have a central service center in Pittsburgh too.

[K Gardner]

8. Wonder what happens to the people who bought extended CC warranties.. ?

[doc03]

10. I am not sure but hopefully a third party takes

care of those.

[K Gardner]

7. CC closed its "old" storefront here last year, built a HUGE new concrete box 1/2 mile away - now

both concrete boxes will sit empty.

Target tore down one of the oldest, most beautiful homes in this city to build a concrete box with an orange band around it - hideous monstrosity. Years later, Target built a big new shiny concrete box next to the brand new Circuit City.

Now we have an empty old concrete box where the historic home used to be, an empty CC store next to an almost empty Mall, and soon another empty CC building.

There's lots of room for the freezing homeless in my city, but they're still under bridges and freezing.

Wall St. still gets its bailout, I hear.

Nothing makes sense to me anymore. :shrug:

[Cessna Invesco Palin]

9. Hmm...

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.

This was one of the reasons given for the problems that instigated the massive layoffs at my former employer. They simply would not sell to retailers who did not have cash on hand or could not get adequate credit insurance.

[GoesTo11]

11. I ordered my HDTV converter from them

Haven't gotten it yet. I wonder if they will send it. If not, I probably lost my coupon.