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Hilco, Gordon Bros. Handling Circuit City Fire Sales

11/06/2008 03:20:00 PM Eastern

Richmond, Va. — Liquidation sales on $300 million worth of inventory that began yesterday at 154 Circuit City stores are being conducted by Hilco Merchant Resources and Gordon Brothers Retail Partners, a government filing shows.

An additional store will be closed by Circuit City on its own.

According to an 8-K filing by Circuit City with the United States Securities and Exchange Commission (SEC) dated Oct. 31, the retailer will be paid a guaranteed amount equal to 72 percent of the cost value of the merchandise included in the sales.

The liquidators, which formed a joint venture, will receive an agent’s fee equal to 3.5 percent of the cost value of the merchandise.

Any remaining proceeds will be shared equally by Circuit City and the liquidators.

Hilco and Gordon Brothers said the $300 million in inventory is being sold at discounts of up to 30 percent.

“This sale comes at a perfect time for everyone to enjoy large savings on many of their holiday gift purchases,” Hilco president/CEO Michael Keefe said in a statement.

“Merchandise will be marked down to sell fast. Everything must go,” added Stephen Miller, principal and managing director, Gordon Brothers Group. “The timing couldn’t be better for consumers. We don’t expect this sale to last very long.”

The liquidation sales are expected to be completed on or before Dec. 31, the filing indicated.

All sales at the 154 stores are final, and no gift cards are being sold. The stores are accepting cash and all major credit cards but no checks, the liquidators said.

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