Circuit City Liquidation Sales Hit $450 Million
Sale Could Conclude Next Month
By Alan Wolf -- TWICE, 1/29/2009
Richmond, Va. — Circuit City’s liquidators have sold $450 million of the chain’s $1.8 billion in inventory in the first two weeks of clearance sales, and expect to conclude the liquidation weeks ahead of schedule due to “record shopper turnout.”
According to Great American Group, one of four liquidation firms hired by Circuit City, sales have exceeded expectations and may only continue for another four or five weeks, well in advance of a federal bankruptcy court’s mandated cutoff of March 31.
“We are very pleased with the reception that these clearance sales [have] received,” said Scott Carpenter, executive VP and operations director for Great American Group.
Circuit City’s nine national distribution centers are being “emptied out” to accommodate demand for the discounted electronics, he said, and traffic is expected to increase this weekend as shoppers hunt for bargains on 50-inch and larger TVs for this Sunday’s Super Bowl.
Great American CEO Andy Gumaer said the liquidation is only expected to continue for another four or five weeks due to brisk sales, rather than the two months originally anticipated.
Despite the unexpected demand, the discounters have instituted deeper discounts on select goods, effective today. The latest clearance sales include 25 percent off original prices on all plasma TVs, 20 percent off select LCD models, 40 percent off car audio products, and “substantial discounts” on all other store merchandise, including computers, cameras, camcorders, video games, MP3 players, DVDs and CDs, Great American said.
The liquidation has been criticized by consumers who claim that prices on some products have actually increased since the sale, and are higher than those found at other CE chains.
In other Circuit City news, a monthly operating report filed yesterday with the Securities and Exchange Commission (SEC) shows that the company accrued losses of nearly $414 million for the 20-day period following its Chapter 11 filing on Nov. 10.
According to the report, which had been submitted to the federal bankruptcy court here, the retailer brought in net sales of more than $700 million from Nov. 10-30, which spanned the critical Black Friday weekend. But upfront payments for merchandise, along with warehousing and selling costs, hit $616 million for the period.
The report also showed total assets of nearly $3.6 billion as of Nov. 30 and total liabilities of $2.9 billion.
Circuit City is expected to return to bankruptcy court today for a hearing on administrative expense claims. The court will also hear arguments from Chase Bank, which seeks to discontinue its credit card program with the failed CE chain, Associated Press reported.
Separately, Circuit City will hold a two-day job fair next month for Richmond-area workers and is also posting potential job openings nationwide online at LinkedIn.com.
The job fair will be held at company headquarters here on Feb. 3-4, and is open to all current and former Circuit City associates, the company said. Dozens of recruiters are expected to be on hand from companies representing a broad range of public and private fields, including retail, financial and temp agencies.
“We were blessed to have some of the smartest and most dedicated employees in the American workforce,” acting president/CEO James Marcum said in a statement. “As we regrettably wind down our operations, we want to do everything we can to help members of the Circuit City family prepare for the next phase of their careers.”
