Circuit City to close stores, sell merchandise
- January 16, 2009
Henrico County electronics retailer Circuit City Stores Inc. announced Friday that it is seeking permission to shutter its 567 stores and sell of its merchandise, affecting more than 30,000 employees.
Circuit City officials said it was unable to reach a deal with creditors and lenders to continue operating.
The company’s acting President and CEO James A. Marcum said in a statement: “We are extremely disappointed by this outcome. The company had been in continuous negotiations regarding a going concern transaction. Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company.”
The company is asking a federal bankruptcy judge for permission to start the liquidation process, which will be handled by four firms — Great American Group, Hudson Capital Partners, SB Capital Group and Tiger Capital Group. The firms will complete the sale by March 31. Under the agreement, Circuit City will received at least 70.5 percent of what it paid for the merchandise.
Above that, proceeds will be split 70-30 between Circuit City and the four companies. The companies can use Circuit City employees to finish the sale, but also can fire them. (Richmond Times-Dispatch)