Intrepidation

Circuit City to liquidate remaining US stores

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Bankrupt Circuit City Stores Inc., the nation's second-biggest consumer electronics retailer, said Friday it failed to find a buyer and will 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.

The liquidation of Circuit City is the latest fallout from the worst holiday shopping season in four decases. People have slashed their spending since the financial meltdown in September as they worry about their job security and declining retirement funds.

Other recent casualties include KB Toys, which filed for bankruptcy in December and is liquidating stores. Department store chains Goody's Family Clothing and Gottschalks Inc. both filed for bankruptcy this week -- Goody's plans to liquidate, while Gottschalks hopes to reorganize.

Industry experts expect more bad news in the coming months as spending likely will deteriorate further.

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.

"Very, very sad," said Alan L. Wurtzel, the son of company founder Samuel S. Wurtzel, and the chief executive from 1972 to 1986, board chairman from 1986 to 1994 and vice chairman until 2001. "I feel particularly badly for the people are employed or until recently were employed."

Wurtzel has previously said Circuit City didn't take the threat of rival Best Buy Co. seriously enough and, at some points, were too focused on making a profit in the short term instead of building long-term value.

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 company still needs final approval of a liquidation from the court.

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.

http://www1.whdh.com/news/articles/business/BO101672/

"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."

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wow, crazy. here in anderson we had a KB toys, we actually had 2 in the same mall before toys r us opened. they merged about 10 yrs ago, then folded about 5 or 6 yrs ago. same mall had a goody's. it folded just 2 years ago. now we losing circuit city. best buy now has a monopoly in anderson cause the only thing it has to worry about is HH greg and ... pffttt sears.

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My cousin and his wife worked a CC years ago. I believe they were sales managers. They both ended up wuitting because even though his wife was pregnant, they would still force her to work ungodly hours. I've heard lots of bad things about the management CC has had for years, and for a long time their customer service was terrible. It got better recently but still not great.

I buy newegg. Sorry Circuit City or "Best Buy" but they just can't compete with prices, selection, and most of all, customer service. newegg has extremely high standards for ensuring their customers are happy, which is why they keep coming back.

Still if there's a CC in the area I will go see what's left to offer.

That all being sad I feel sorry for those 30,000 people who just lost their jobs.

I wonder just how well Best Buy is doing?

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Yeah, on Circuit City's website it states their Canadian operations will remain open. They're done in the US though.

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My cousin and his wife worked a CC years ago. I believe they were sales managers. They both ended up wuitting because even though his wife was pregnant, they would still force her to work ungodly hours. I've heard lots of bad things about the management CC has had for years, and for a long time their customer service was terrible. It got better recently but still not great.

I buy newegg. Sorry Circuit City or "Best Buy" but they just can't compete with prices, selection, and most of all, customer service. newegg has extremely high standards for ensuring their customers are happy, which is why they keep coming back.

Still if there's a CC in the area I will go see what's left to offer.

That all being sad I feel sorry for those 30,000 people who just lost their jobs.

I wonder just how well Best Buy is doing?

Best Buy is sh*tting major-brickagge as WalMart* usurps everything which Best Buy can do, only 'Wally' can do it for less. There are Koreans, Chinese, Indians, Pakistanis and Indonesians toiling through the night (so you won't have to) just to save us a few pence off of a Flat-Screen. Unemployment, still made here in America. A nephew of mine just left Circuit City after his 4-year stint came to an abrupt end. He's coming to work with my Dad and Brothers beginning Monday, January 26th...

Enjoy the savings.

Personally doubt if BB makes it to 2010.

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Wal Mart is utter $h!. Just like their products.

They're the cancer 'we' clamor for.

The cancer many now need to survive.

Vicious and insidious circle.

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Best buy will hang on for a while....as far as retailers go, they are in pretty solid shape, like

Bed, Bath and Beyond.

It is places like Sears and the Gap that you have to worry about....

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Gap? Why Gap? They own so many damn stores I have a hard time seeing them floundering. What have you heard? I think they're crap, so I won't miss them, but I've never heard any speculation on them like that.

As far as Circuit City goes, do not miss them! Best Buy is almost always a better buy, and BB actually stocked product. BB may not be the best, but their customer service is amazing.

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I may have to see if I can get some new 16GB Flash drives on the cheap now...

Sucks though. I could usually find good prices on CDs there.

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Gap? Why Gap? They own so many damn stores I have a hard time seeing them floundering. What have you heard? I think they're crap, so I won't miss them, but I've never heard any speculation on them like that.

As far as Circuit City goes, do not miss them! Best Buy is almost always a better buy, and BB actually stocked product. BB may not be the best, but their customer service is amazing.

The Gap and BR are bringing them down...not to mention they cost about the same....

The only company that makes them any money is Old Navy....

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The writing was on the wall. I had a friend in management at CC and he bailed a few months ago because he said things weren't looking good at all.

It's sad... I can remember when they built the first Circuit City in our small town. It was such a "big deal".

They closed one store here in charlotte a few months ago, but the bigger, better one remained open. CompUSA went out last year. So now all we have here (That I know of) is Best Buy.

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It is places like Sears and the Gap that you have to worry about....

my sister works at sears, she says its bad. they are circling the drain.

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That sucks, Sears is one of the few places that still sells a good selection of Made in USA tools.

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Sears has been struggling for years. Too bad, they are such an American institution. So many houses were built by Sears back in the day...and unlike the prefab houses manufactured today, those were both well-designed and full of character.

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my sister works at sears, she says its bad. they are circling the drain.

They are getting ready to close some stores anyways....

We should know in a few weeks if they are toast or not.....

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That sucks, Sears is one of the few places that still sells a good selection of Made in USA tools.

:yes:

I like them because they are "quirky"...when you want something different...

Most of their is pretty good, though many times overpriced.....

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The parking lot at Circuit City was packed last night. I was talking to someone last night who was hoping he could wait a few weeks and get a laptop for cheap. I have a feeling all the good stuff will be gone before the discounts drop to 90%.

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Nothing sparks a kids delight until they go through the Christmas Wish Book from Sears. I remember how much fun it was as a kid to go through the book and make a checklist of things I'd like for Christmas. Ordering from the catalogue was so effortless and rewarding for people in rural areas not having a Sears retail store for hundreds of miles. It was like having one on your doorstep. Now, it can all be done by e-shopping; however, shipping charges are ABSURD if you purchase for delivery from BB (Future Shop, etc.). At least Sears was always cheap for that.

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