Circuit City Liquidation Begins Saturday
By Alan Wolf -- TWICE, 1/16/2009
Richmond, Va. — Going-out-of-business sales began at Circuit City’s 567 remaining stores this weekend after a federal bankruptcy court approved the chain’s request to retain four liquidation firms.
The close-out specialists include Great American Group, Hudson Capital Partners, SB Capital Group and Tiger Capital Group. The court gave them until March 31 to sell off the retailer’s approximately $1.3 billion in inventory.
Circuit City had been in negotiations with two potential buyers, identified as Mexican investor Ricardo Salinas Pliego and Golden Gate Capital, a private equity firm, but neither was able to raise sufficient funding for the acquisition. A key sticking point, according to courtroom accounts by Bloomberg News, was lenders' demand that manufacturers ship Circuit merchandise on credit.
Given more time to negotitate a sale, the retailer could have reorganized as a smaller chain, a Circuit City attorney told the court. But the creditors committee, which includes key vendors, called off the negotiations after the company failed to provide any evidence that a sale was possible, Bloomberg reported.
The liquidators have been authorized to retain store employees as needed and provide retention bonuses of up to 10 percent, court documents show. They are also permitted to sell home-theater and 12-volt installation services up to 10 days before a store location closes.
Hudson, SB and Tiger also conducted liquidation sales for Tweeter.
Circuit City is still looking to sell its 765 Canadian stores as a going concern. Formal bids are expected by Jan. 23.
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What concerns me is where are you supposed to go when your in need of some really nice home audio & video equipment. Nevermind someone that is actually smart. Its really sad that in 5-10 years your EXPERTS will be Wal-mart & Costco. Just makes me sick. I think all these vendors need to be smart like Bose, Sony ES, Martin Logan, and other vendors which protects its price from these cheap discount chains that are ruining everything, including the market.
Concerned - 2009-23-1 00:45:00 EST -
So this floods the market place with over a billion dollars worth the inventory at a traditionally slow time of the year. Other retailers should see a dent in their business for the next quarter. If you are a business on the edge this could push you over as CC takes people out of the market.
roadkill - 2009-19-1 11:46:00 EST -
Listen to what Sarcasm says. Dont just listen to the liquidators, get something in writing. Payment on a daily basis, SOMETHING !! Otherwise you will get the bone.
Do feel sorry about the real customers but for those people who are "tire kickers" and waist your time. Have fun going to Costco and watching your HD tv on a channel that isnt. Ha Ha.
When your tv breaks and you threw away the box and you have to ship it to CA to get fixed. Ouch..
Wrong product at the right price is still the wrong product....
frank - 2009-18-1 20:27:00 EST -
HHGregg seems poised to quickly take over Circuit City's as the #2 CE retailer in the country. I wouldn't be surprised to see them expand east into New York and New England and fill some of the vacated locations with in a year to 18 Months. Many of the Boston area Circuit City stores were very profitable in comparison to the rest of the country. I could definitely foresee some of the Circuit City investors (Salina Plegio) putting up some capital to help HHGregg expand. Competition is good for the industry and for the consumer.
Also, Home Depot and Lowes may get into the HE realm now that CC is out of the picture (Home Depot already has test stores with full HE sections staffed by a 3rd party).
It would make sense for one of these chains to buy the Circuit City name and create a Circuit City inside a Lowes or Home Depot
Matt - 2009-18-1 14:10:00 EST -
As a former 10yr Ultimate employee. Im glad this is happening, now all cheapo idiots who think its funny to waste 2 hours of a highly skilled employees time to save a few buck from whoever.com cant go to local stores anymore to see the goods before buying it.
This Fire sale will eventually hurt best buy also. Big stores like BB cant survive either with 4 bad months in a row. Plus Walmart is in control of Sony now that 1500 circuit us/can, 250 some units once controlled by Tweeter and other examples above have wiped out about half of the US CE sales in the last 4yrs.
Consumer Reports worthless tests have also led customers to buy absolute crap like Visio...etc and their 25% failure rate. Hey Did anyone ever invent the plasma refill station (lol).
Vendors also deserve to be stiffed on payments. If they had not got greedy and left good stuff at good local guys only and stopped this internet cross ship, rip off.
Todd Brommel - 2009-17-1 22:48:00 EST
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