Monday, January 19, 2009

Circuit City to Close

I thought I posted this here on Friday, and for some odd reason it's not showing up for me here but shows up in Multiply... I'll post again... hopefully it's not a repeat...

Edited to say: I know what I did now, I posted it to my recipe blog by accident. LOL!!!!

Circuit City to Close After Failing to Find a Buyer

Circuit City, once a bellwether American retailer, is going out of business for good, stripping the nation of its second-largest consumer electronics chain.
The company, which filed for bankruptcy protection in November, said Friday that it would liquidate its stores and other assets.
Just last week, Circuit City — which has some 30,000 employees and 567 stores — was in talks with two potential buyers, but it was unable to reach a timely agreement with its creditors and lenders.
“We are extremely disappointed by this outcome,” said James A. Marcum, vice chairman and acting president and chief executive of Circuit City Stores Inc. He called the liquidation “the only possible path for our company.”
The demise of Circuit City, while not surprising given its declining sales, is part of a radical shift taking place in American retailing. Weak chains — unable to weather the freeze-up in consumer spending, and choked by tight credit markets — are shuttering their doors.
Last year, a raft of retailers including Boscov’s, Sharper Image, Mervyns, Linens ’n Things, Whitehall Jewelers and Steve & Barry’s filed for bankruptcy protection. This week alone, Goody’s Family Clothing and Gottschalks Inc. also filed. Many more retailers are expected to follow suit as they run out of working capital or are unable to finance their debt. But emerging from bankruptcy is harder than ever because of changes in the bankruptcy code and vise-like credit markets.
Indeed, Wall Street analysts said in November that the prospects of long-term survival for the Circuit City were bleak. Months of declining sales during the recession sent the company over the edge, although its problems go back a decade, from buying cheap real estate leases in inferior locations to laying off its most experienced sales staff. The latter saved money but cost the company employee morale and countless customers.
When the retailer filed for Chapter 11 bankruptcy in November, its shares had lost more than 90 percent of their value since the beginning of 2008.
The company is still awaiting final approval of the liquidation from federal bankruptcy court


Anonymous said...

I am keeping you guys in my thoughts & prayers, Mandi! ((Hugs))

Jackie said...

When I drove by our Circuit City yesterday and saw that it had already been turned over to liquidators, my first thought was of you and your family. Please keep us posted and know that I'm thinking of you.