Circuit City Wind-Down: What Happens Now
By Alan Wolf -- TWICE, 1/20/2009
Richmond, Va. — Circuit City’s four liquidators have until March 31 to sell off all merchandise and fixtures in the chain’s distribution centers and 567 remaining stores.
The liquidators have been authorized to retain store employees as needed and provide retention bonuses of up to 10 percent, court documents show. Corporate employees, numbering about 1,500, will wind down headquarters operations over the next two months and will be paid during that time, although a skeleton crew will likely remain for the additional one to two years it could take to completely shut down the business.
By Jan. 17 Circuit City’s e-commerce site had come down, replaced with a notice thanking “all of the customers who have shopped with us over the past 60 years … Due to challenges to our business and the continued bleak economic environment, Circuit City is going out of business and the company's assets will be liquidated to pay off creditors.”
According to the notice, gift cards will be honored at full value and returns will be accepted on purchases made prior to Jan. 16. Repair work already underway will be completed, but no additional jobs will be accepted. In addition, the liquidators can continue to sell extended warranties, which are administered and backed by Circuit City’s longtime provider Assurant Solutions, although all home and car installation services have been suspended.
Circuit City is still looking to sell its 765 Canadian stores as a going concern, and is expected to receive formal bids for the former RadioShack franchise operation by Jan. 23.
The retailer will also likely sell its online operation, its Firedog service business and, ultimately, its brand, which will keep the company alive in name only.
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