Circuit City has entered its final phase of liquidation, shuttering its remaining stores as of yesterday, while lease auctions remain underway.
The shutdowns come about a week ahead of schedule and two weeks earlier than originally planned, as the stores are “basically running out of inventory,” Scott Carpenter, VP of liquidator Great American Group, told The Associated Press.
TWICE confirmed the report with Tiger Capital Group, another of Circuit City’s four liquidators that together sold off some $1.7 billion of inventory in seven weeks.
An auction for the chain’s leases was held by a federal bankruptcy court here late last month. Leases to the remaining stores will be auctioned off by March 10.
About $1 billion in inventory was sold in the first month of liquidation sales, including 272,700 flat-panel TVs, 53,800 home-theater systems, 266,600 digital cameras, 79,100 notebook PCs, 38,700 desktop PCs, 143,900 printers, 62,300 camcorders, 92,700 GPS devices, 88,100 car audio speakers and more than 6 million DVDs and CDs.
Great American Group, which has been overseeing the going-out-of-business sales for a joint venture that also includes SB Capital Group, Tiger Capital Group and Hudson Capital Partners, described the liquidation as among the largest in U.S. retail history.
Meanwhile, Bell Canada has agreed to buy InterTAN, Circuit City’s 750-store Canadian subsidiary, for an undisclosed sum. Canada’s largest carrier said it will use the stores to sell it wireless, Internet and HDTV services. The sale is expected to close in the third quarter pending court approval in the United States and Canada.
Circuit City acquired the business in May 2004. The chain, comprised largely of franchised RadioShack stores, was later renamed The Source by Circuit City.
Bell Canada will keep the name and continue to operate the business independently under its current management team, led by president and Circuit City veteran Ron Cuthbertson. The stores will continue to carry A/V and PC products in addition to Bell’s telecommunications handsets and services.
Separately, the federal bankruptcy court approved Circuit City’s request for nearly $4 million in stay-on incentives for executives, midlevel employees and assorted staffers.
James Marcum, Circuit City’s vice chairman and acting president/CEO, removed himself from the plan to appease creditors.
The chain said the bonuses are necessary to keep essential staffers on board through the wind-down process, which could add $250 million to the company’s value if successfully completed.
Employees will be paid in increments based on the completion of their tasks, which include liquidating remaining assets, shutting down remaining businesses and reconciling claims.
In other Circuit City news:
• The federal bankruptcy court approved Circuit City’s request to hire Liquid Asset Partners, a Grand Rapids, Mich.-based liquidator, to sell off all its furniture, fixtures and equipment from seven distribution centers, four service centers, two corporate offices and one call center.
• The company reported losses of nearly $21 million in December on sales of just more than $1 billion. According to a filing with the United States Securities and Exchange Commission, the $21 million loss included an $8 million impairment charge. Assets totaled $3.1 billion as of Dec. 31 and total liabilities were $863 million.