Bankruptcy

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

By J. Michael McBride

Negotiations for the acquisition sale of Circuit City went past midnight Thursday, but were not successful. The electronic store stated Friday that is will go out of business and begin the liquidation process starting as early as Saturday with only a 70.5% return on merchandise. Although the retailer had closed 155 of its stores late last year after filing for bankruptcy protection under Chapter 11 in November, it still employed over 30,000 in its remaining 567 U.S. stores. As of August 31, the retailer had $3.4 billion in assets and $2.32 billion in liabilities. There are still viable bids to acquire the retailers 765 Canadian stores. With the closing of Circuit City, Best Buy is now the market leader.

Quote by 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:

"Losing Circuit (City) and what had previously been an $11 billion business, in addition to share gains from other smaller outlets, should help to partially offset weaker consumer spending as well as further secure Best Buy's position as the leader in the space. I feel particularly badly for the people are employed or until recently were employed."

Article link:
http://www.chicagotribune.com/business/sns-ap-circuit-city-bankruptcy,0,3745338,print.story

Chandra

Full post as published by Texas Lawyer Blog on January 16, 2009 (boomark / email).