Circuit City to liquidate remaining US stores

gosmosis · 01-16-2009, 11:00 AM

Circuit City to liquidate remaining US stores
Circuit City to liquidate remaining US stores

By MICHAEL FELBERBAUM and VINNEE TONG, AP Business Writers Michael Felberbaum And Vinnee Tong, Ap Business Writers – 33 mins ago

Reuters – The logo for Circuit City store is seen in New York November 10, 2008. (Shannon Stapleton/Reuters)

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.

Loves2Watch · 01-16-2009, 11:07 AM

Link no workie...

firsTraveler · 01-16-2009, 11:08 AM

http://www.bloomberg.com/apps/news?p...bRI&refer=home

I'm a little surprised that Best Buy didn't buy it. But eiter way it wont be missed.

keltic25 · 01-16-2009, 11:17 AM

So where will their liquidated inventory be sold? Only through their stores, on their website, locations that the liquidation company specifie, or what?

I wouldn't mind picking up a cheap TV or theater system. The question is where?

gosmosis · 01-16-2009, 11:17 AM

Quote:

Originally Posted by firsTraveler

http://www.bloomberg.com/apps/news?p...bRI&refer=home

I'm a little surprised that Best Buy didn't buy it. But eiter way it wont be missed.

I won't miss it either, but it's still a little depressing as it continues to show the volatility of the economy in general. Also, I hate to see folks who depended on CC for their income/employment be without jobs. That is never a good thing and I hope they can find work.

gosmosis · 01-16-2009, 11:50 AM

Quote:

Originally Posted by keltic25

So where will their liquidated inventory be sold? Only through their stores, on their website, locations that the liquidation company specifie, or what?

I wouldn't mind picking up a cheap TV or theater system. The question is where?

Yeah, I don't know how that works. Currently, their website reads no differently. So, do they pick a date when the liquidation sales begin? I suspect so. Probably the sales they have will only lower their prices down to what the online vendors have always been selling at

1080peon · 01-16-2009, 12:01 PM

Does anyone know if my 3 year protection plan that I bought for my plasma is now worthless? Or is it still covered by an outside warranty company (firedog)?

I'm starting to sweat a little over here.

electrictroy · 01-16-2009, 12:10 PM

Quote:

Originally Posted by keltic25

I wouldn't mind picking up a cheap TV or theater system. The question is where?

Ditto. Also I wanted to buy two more Zenith DTV boxes before my coupon expires.

gosmosis · 01-16-2009, 12:50 PM

I may go to local CC tomorrow to snoop around. Just to see what's going on. My local CC never had a good selection of Blu-ray discs, so nothing there is expected. They did have a decent hi-fi selection overall. Some decent speakers. I would love to pick up a set of 5.1 satellite speaker system...if cheap. I'd also like to check out their car amps and subs to see if something cheap there.

tagprod · 01-16-2009, 12:51 PM

Quote:

Originally Posted by 1080peon

Does anyone know if my 3 year protection plan that I bought for my plasma is now worthless? Or is it still covered by an outside warranty company (firedog)?

I'm starting to sweat a little over here.

People with Circuit City warranties might be out of options.

"If the warranty is from manufacturer, they should be fine," said Jack Gillis, director of public affairs for the Consumer Federation of America. "You will need a proof of purchase, like an original receipt, but if they have a service contract from the company then they may be out luck."

http://www.foxbusiness.com/story/mar...aining-stores/

sonyman777 · 01-16-2009, 01:06 PM

you all seem to have hated circuit city, i always really
liked them. the sales staff was not great, but i liked the
stores, and i thought they had good prices on tv's and
quite a nice selection to look at. i will miss having them around.

gosmosis · 01-16-2009, 01:32 PM

Quote:

Originally Posted by sonyman777

you all seem to have hated circuit city, i always really
liked them. the sales staff was not great, but i liked the
stores, and i thought they had good prices on tv's and
quite a nice selection to look at. i will miss having them around.

I do not detect anyone hating them. I just said I will not miss them...meaning, I have other outlets that I have a more loyal following to. Again - I feel badly for the employees and any customers who will lose out in any way by this. I never did like going into their stores here locally though, cause I always got this feeling that the whole sales crew were waiting to say hello or can I help you. Never liked that.

gosmosis · 01-16-2009, 03:26 PM

Here is what you get when you go to CC website now.

Vinceg99 · 01-16-2009, 04:14 PM

Circuit City to shut down
Court filing shows bankrupt electronics retailer seeks approval to sell merchandise in its remaining 567 stores.
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See all CNNMoney.com RSS FEEDS (close) By Parija B. Kavilanz, CNNMoney.com senior writer
Last Updated: January 16, 2009: 3:37 PM ET

A new sales tax holiday

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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 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, a private equity 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," referring to two stores forced to close most or all of their locations.

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."

NPD Group's retail analyst Marshal Cohen warned that no retailer is "sacred" in this environment unless "you have a service model that differentiates you from the competition and keeps pace with changing needs of the consumer."

He said Circuit City was late to the game with its Firedog customer service business, and it didn't resonate with customers as well as Best Buy's Geek Squad was business.

What's more, Cohen said Circuit City found itself in the unfortunate position of becoming the "monkey in the middle" as Wal-Mart (WMT, Fortune 500) aggressively moved into the electronics market with its low prices model, and Best Buy continued to widen the gap with its competitors and dominate as the industry leader.

"Circuit City just got stuck in the middle for too long," said Cohen.

First Published: January 16, 2009: 11:16 AM ET

Thousands of stores to disappear in 2009
Windy City's retail downdraft

Vinceg99 · 01-16-2009, 04:15 PM

So looks like the sales MAY start tomorrow.

01-16-2009, 11:00 AM	#1
gosmosis <<PRIEST>> Join Date: Jan 2008 Location: Central Illinois Age: 46 Posts: 4,695	Circuit City to liquidate remaining US stores Circuit City to liquidate remaining US stores Circuit City to liquidate remaining US stores By MICHAEL FELBERBAUM and VINNEE TONG, AP Business Writers Michael Felberbaum And Vinnee Tong, Ap Business Writers – 33 mins ago Reuters – The logo for Circuit City store is seen in New York November 10, 2008. (Shannon Stapleton/Reuters) 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. __________________ Samsung LN-4069F LCD Klipsch RP3 front, RC3 center, KSW 15 sub Polk Audio (model?) rear Denon AVR 988 receiver Sony BDP-S350 blu-ray Pioneer DV-563A DVD-SACD/DVD AUDIO Mediacom Last edited by gosmosis; 01-16-2009 at 11:14 AM.

01-16-2009, 11:07 AM	#2
Loves2Watch SPAM Police Join Date: Aug 2007 Location: AZ, NM, TX, MX Posts: 13,972	Link no workie... __________________ Theater 1 - Panasonic TH-85PF12U Plasma TV, 6 Conrad Johnson LP275M Amps, Anthem Statement D-2 Pre/Pro, 6 Thiel SCS4 Speakers, 2 REL T-1 Subs, Infinity Interlude 120S Sub, Simaudio MOON Orbiter Universal Disc Player, ELP Laser Turntable, 2 Dish Network ViP 622 DVR's, Oppo BDP-83 Blu-ray Player, Onkyo DV-HD805 HD DVD Player.

01-16-2009, 12:50 PM	#9
gosmosis <<PRIEST>> Join Date: Jan 2008 Location: Central Illinois Age: 46 Posts: 4,695	I may go to local CC tomorrow to snoop around. Just to see what's going on. My local CC never had a good selection of Blu-ray discs, so nothing there is expected. They did have a decent hi-fi selection overall. Some decent speakers. I would love to pick up a set of 5.1 satellite speaker system...if cheap. I'd also like to check out their car amps and subs to see if something cheap there. __________________ Samsung LN-4069F LCD Klipsch RP3 front, RC3 center, KSW 15 sub Polk Audio (model?) rear Denon AVR 988 receiver Sony BDP-S350 blu-ray Pioneer DV-563A DVD-SACD/DVD AUDIO Mediacom

01-16-2009, 01:06 PM	#11
sonyman777 hd rules!!!! Join Date: Jul 2007 Location: COLUMBUS,OH. Posts: 58	you all seem to have hated circuit city, i always really liked them. the sales staff was not great, but i liked the stores, and i thought they had good prices on tv's and quite a nice selection to look at. i will miss having them around. __________________ hi -def rules!!!!!!!!!!!!

01-16-2009, 03:26 PM	#13
gosmosis <<PRIEST>> Join Date: Jan 2008 Location: Central Illinois Age: 46 Posts: 4,695	Here is what you get when you go to CC website now. __________________ Samsung LN-4069F LCD Klipsch RP3 front, RC3 center, KSW 15 sub Polk Audio (model?) rear Denon AVR 988 receiver Sony BDP-S350 blu-ray Pioneer DV-563A DVD-SACD/DVD AUDIO Mediacom

01-16-2009, 11:08 AM	#3
firsTraveler High Definition is the definition of life. Join Date: Jan 2006 Posts: 429	http://www.bloomberg.com/apps/news?p...bRI&refer=home I'm a little surprised that Best Buy didn't buy it. But eiter way it wont be missed.

01-16-2009, 11:17 AM	#4
keltic25 A couch and an HDTV to go please. Join Date: May 2007 Posts: 10	So where will their liquidated inventory be sold? Only through their stores, on their website, locations that the liquidation company specifie, or what? I wouldn't mind picking up a cheap TV or theater system. The question is where?

01-16-2009, 12:01 PM	#7
1080peon High Definition is the definition of life. Join Date: Oct 2008 Location: Houston, TX Posts: 47	Does anyone know if my 3 year protection plan that I bought for my plasma is now worthless? Or is it still covered by an outside warranty company (firedog)? I'm starting to sweat a little over here.

01-16-2009, 04:14 PM	#14
Vinceg99 High Definition is the definition of life. Join Date: Jan 2009 Location: Wisconsin Posts: 436	Circuit City to shut down Court filing shows bankrupt electronics retailer seeks approval to sell merchandise in its remaining 567 stores. EMAIL \| PRINT \| SHARE \| RSS Yahoo! Buzz DIGG FACEBOOK DEL.ICIO.US REDDIT STUMBLE UPON MYSPACE MIXX IT Subscribe to Top Stories feed://rss.cnn.com/rss/money_topstories.rss Paste this link into your favorite RSS desktop reader See all CNNMoney.com RSS FEEDS (close) By Parija B. Kavilanz, CNNMoney.com senior writer Last Updated: January 16, 2009: 3:37 PM ET A new sales tax holiday More Videos 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 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, a private equity 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," referring to two stores forced to close most or all of their locations. 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." NPD Group's retail analyst Marshal Cohen warned that no retailer is "sacred" in this environment unless "you have a service model that differentiates you from the competition and keeps pace with changing needs of the consumer." He said Circuit City was late to the game with its Firedog customer service business, and it didn't resonate with customers as well as Best Buy's Geek Squad was business. What's more, Cohen said Circuit City found itself in the unfortunate position of becoming the "monkey in the middle" as Wal-Mart (WMT, Fortune 500) aggressively moved into the electronics market with its low prices model, and Best Buy continued to widen the gap with its competitors and dominate as the industry leader. "Circuit City just got stuck in the middle for too long," said Cohen. First Published: January 16, 2009: 11:16 AM ET Thousands of stores to disappear in 2009 Windy City's retail downdraft

01-16-2009, 04:15 PM	#15
Vinceg99 High Definition is the definition of life. Join Date: Jan 2009 Location: Wisconsin Posts: 436	So looks like the sales MAY start tomorrow.

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