Circuit City to Shutter Remaining 567 U.S. Stores
- Jan 16, 2009
Electronics retailer Circuit City Inc., which filed for bankruptcy in November, will close all 567 of its remaining U.S. stores and liquidate the entirety of its inventory after failing to reach agreements with creditors that would have allowed the company to continue operations. Circuit City entered a filing with the U.S. Bankruptcy Court for Virginia’s Eastern District that said the firm had agreed to liquidate its assets. The sale will begin Saturday and run through March. When initially filing for Chapter 11 bankruptcy on Nov. 10, the company hoped to keep its stores open while undergoing a corporate restructuring. However, the company was unable to reach an accord with its creditors or find a buyer that would allow it to continue operations. “We are extremely disappointed by this outcome,” said acting Circuit City CEO James Marcum, in a release. “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.”The retailer’s 34,000 employees will receive 60 days’ notice of termination, and those laid off earlier will receive compensation for the 60-day period beginning Friday. The shutdown only affects Circuit City’s U.S. operations; the firm’s 765 Canadian stores and dealer outlets will remain open. There does remain a possibility that the firm could be bought out of bankruptcy and reorganized. Circuit City follows fellow failed electronics retailers CompUSA and Tweeter, all of which fell prey to the down economy, the increasing popularity of online retailing and the rise of Best Buy and Wal-Mart as the nation’s dominant electronics sellers.