Circuit City to liquidate remaining US stores

[TrainTrac]

Sad news for Circuit City and its employees, but looks like this might be a good opportunity for consumers to pick up some electronic stuff at cheaper prices during the liquidation sales.

Circuit City to liquidate remaining US stores

Circuit City and liquidators to sell off merchandise in remaining 567 US stores



* Michael Felberbaum and Vinnee Tong, AP Business Writers

* Friday January 16, 2009, 11:37 am EST



Circuit City Stores Inc., the nation's second-biggest consumer electronics retailer, said Friday it had run out of options and will be forced to liquidate its 567 U.S. stores. The closures could send another 30,000 people into the ranks of the unemployed.



"This is the only possible path for our company," James A. Marcum, acting chief executive, said in a statement. "We are extremely disappointed by this outcome."



The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable. And bleak holiday sales results further weakened even the stronger retailers.



Circuit City said in court papers it has appointed Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC as liquidators.



"Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders," Marcum said.



Shareholders are likely to receive nothing, as is typical in bankruptcy cases. It was unclear what would happen to the company's 765 retail stores and dealer outlets in Canada.



Circuit City filed for Chapter 11 bankruptcy protection in November as vendors started to restrict the flow of merchandise ahead of the busy holiday shopping season.



It had been exploring strategic alternatives since May, when it opened its books to Blockbuster Inc. The Dallas-based movie-rental chain made a takeover bid of more than $1 billion with plans to create a 9,300-store chain to sell electronic gadgets and rent movies and games. Blockbuster withdrew the bid in July because of market conditions.



Circuit City, which said it had $3.4 billion in assets and $2.32 billion in liabilities as of Aug. 31, said in its initial filings that it planned to emerge from court protection in the first half of this year.



Under court protection, Circuit City has broken 150 leases at locations where it no longer operates stores. The company already closed 155 stores in the U.S. in November and December.



U.S. Bankruptcy Judge Kevin Huennekens had given the company permission to liquidate if a buyout was not achieved.



The liquidation is the latest big blow to the nation's malls, which have suffered from a rise in vacancies as a slew of chains from Mervyns LLC to Linens 'N Things have liquidated. But analysts say that the demise of Circuit City, whose stores range in size from 20,000 to 25,000 square feet, will hurt the fortunes of mall operators even more.



"It will bring to market a glut of big box spaces across the country," said John Bemis, head of Jones Lang LaSalle Inc.'s retail leasing team. "It will have one of the largest impacts on big box real estate across the country."



AP Retail Writer Anne D'Innocenzio contributed to this report.

 

[Jacob Dryer]

Damn I took a gamble a few months back and bought a couple hundred dollars of their stock.. I figured they would get bought out. Guess I can chalk that up as a loss.

 

[Woppy V]

yep. not good.

 

[Woppy V]

P.S. Train Trac... John Galt is probably behind all this and won't stop until the lights of New York go out...

 

[Brett Wustman]

My cousin works at one of the local stores here in Michigan. I just talked to her, and they had a meeting at 10 AM this morning, the store is closing immediately. She has worked there for 6 years now, and went in to work as usual this morning only to hear the news. She also said that there were already some trucks there clearing out some of the store.

 

[TrainTrac]

Woppy V,







Do you listen to Tony Macrini on WNIS-AM? I listened to him for about 10 years while stationed in Tidewater in the Navy. He turned me on to Ayn Rand. I still listen to him in the mornings via the Internet here in IL.

 

[08Red STA]

So what happens when you order something w/ their 24 or 36 month 0% interest deal? Who collects that $?

 

[EddieS'04]

I guess it would be safe to say, ignore this weeks sale paper. Might be no way to replace a faulty product.:blink:

 

[Jacob Dryer]

So what happens when you order something w/ their 24 or 36 month 0% interest deal? Who collects that $?

I'm not sure with CC, but BBY was household finance company, it was not credit issued by the store, but they a large credit company.

 

[Brad B]

Don't count on any bargains. Most of the stock will go back to the vendors that they owe. They were having trouble stocking the shelves before Christmas. Kind of sad, though. Now Best Buy has one less compeditor. I have to admit that I buy almost all my electronics online. Better prices, usually free shipping.

 

[David Griffith 2]

All of them around Atlanta have been going out since Xmas.. I stopped in and they had hardly nothing left.. But they were selling everything down to the buggies, lol.. If you get in there at the right time you can snag some good deals..

 

[David Ponder]

Be careful what you buy.. If its not new in the box, it may not carry a factory warranty.

 

[TomT]

Crap. That means I might have to shop at Best Buy. I HATE Best Buy.

 

[Joe Turner]

TomT:

Crap. That means I might have to shop at Best Buy. I HATE Best Buy.

Me too, well, there is always HH Gregg. I will NEVER shop Worst Buy again.



Been meaning to get me a LCD TV, guess now is the time!

 

[Woppy V]

Train Trac - Never really listened to AM before... I'll check him out if I remember. TY

 

[Johnny O]

They just opened a brand new store near me. Go figure.

 

[Fred]

I don't know about all Circuit City's, but if they all have the crappy service like the one in Asheville NC, it's no wonder they're going away. I quit shopping there years ago.

 

[Jenn D]

CC lost my business last April when we went into to buy a new flatscreen. We wanted the Sony XBR4, but we wanted to "look at it" first. We went to Circuit City because they were running a sweet deal online, and it also included a PS3. We went into the store, looked at the TV, and told the guy we wanted it, but would like them to honor their online price. The clerk was unaware of the online deal but asked his manager. He came back and told us that no, they couldn't honor their online price in the store. So I said "you mean to tell me, I can open my cell phone right now in front of you, order the TV online, and schedule it for in store pickup. Then, and only then, I could get that deal?" The clerk replied yes, and I promptly walked across the parking lot to Best Buy who not only honored CC's online deal, but gave us an additional $100 off, and 3 free blu-ray movies.



From that point on, we refuse to shop at CC.



Good riddance...

 

[TomT]

Jenn D. Many stores have different prices online than at the actual store. However some will let you buy it online then pickup at the store. Have done this a lot with Sears and Fry's. Doesn't make a lot of sense but that's the way many operate.

 

[J Piroth]

The CC here went belly up a couple of months ago when they closed their first round of stores. If the liquidations in other areas are handled the same way as it was in Tallahassee, here's how it'll go down:



1. It's all handled by a liquidation company. The store staff has NO power to negotiate or decide on anything. They can't offer additional open box or floor model discounts or any other kind of consideration. Instead, the liquidator is in charge of everything.



2. They'll start the discounts slow. Initially, only 20-30% on most items, almost all of which seemed to be marked back up to MSRP before the "discount" was applied. We went there during this period and prices were actually cheaper on many items at the Best Buy across the street. Unless it's a price-fixed item that never goes on sale, there's not much point buying there during this phase.



3. Discounts will then be increased mid-week every week or so (longer at first, then more frequently toward the end). 30-40%, 40-50%, etc.



4. The actual store closing date is undefined until the liquidation company evaluates how fast the stock is moving. Once they feel it's near the end, they'll mark everything up to 80-90% off and the store will be gone in a couple of days. The staff here had no idea how long the liquidation sales would take place. Again, it's all up to the liquidators.



5. Once the discounts get deep, the goods go fast. I was in one day when the discounts were 60-70% off and decided against buying a new surge protector since it was $120 to begin with and thus still a bit pricey in my mind. When the discounts jumped to 80-90% just a couple of days later, I went back to see if they still had one and the store was damn-near stripped bare. Fixtures, candy and assorted odd cables were about all that remained.



We bought an entertainment center for our new TV (purchased online) at 40% off, which was a great deal, but I wanted to post this so everyone here is aware of the pitfalls of purchasing too early or too late.



Now that you know the deal, happy hunting.