One more company, the Electronics Giant and Retailer “Circuit City” is going out of business. Court has approved Circuit City to liquidate and to close its remaining 567 stores.
Circuit City was founded in 1949 as the Wards Company and the company has it’s headquarter in Richmond, Virginia.
On Friday, 16th January, 2009, the company announced that they are closing all the remaining stores and sell off its merchandise. The company said that it has 34,000 employees at the time of liquidation. The company already closed 155 stores in different locations of US in November itself.
“We are extremely disappointed by this outcome,” said James Marcum, the acting CEO for Circuit City. He also stated, “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.”
Circuit City was the No. 2 Electronics retail shop after Best Buy. The company had filed for the Bankruptcy in the court of Eastern District of Virginia and on late Friday the judge has approved the same. The company has begun its sale from Saturday, 17th January and it is believed to last till the end of March, 2009. All items are categorized for the final sale.
Already the company’s website is not working and call center service has also been ceased after 18th January, 2009.
The employees of the company will receive 60 days notice of termination and those who have been laid off earlier will get salary and all benefits up to 60 days starting from 16th January, Company stated.
The Circuit City has its operations in Canada also. It has 765 retail stores and dealers outlets in Canada. The company announced that it will continue its Canadian operations as of now. Around three thousand employees are there in its Canadian stores.
The company will redeem its gift cards through out its liquidation sale, however after the stores are closed, the cards will hold no value at all.
“This is very significant. It shows you how bad things are for the retail industry,” said George Whalin, president and CEO of Retail Management Consultants.
George Whalin, the president and CEO of Retail Management consultants stated that the breakdown of the company is due to some management mistakes over the past few years along with the present recession condition.
The CEO of Growth Ventures Group, Love Goel, also agreed with what Whalin has stated. Growth Ventures Group is a private equity firm which is mainly focused on the retailers. Goel however is speculating that if Circuit City could still find a lifeline. He said that in case if Golden Gate Capital bought the company and on restructuring it and make the online only business with some stores would probably can resolve many issues at this time. Golden Gate Capital is one of the lead bidders for this merchant as reported. Circuit City was doing nice online business. Its online business was estimated to $1 Billion. Hence, Goel believes that this may be few more options left with regards to this retail Electronic giant business to sustain.
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Tags: Bankrupt, Circuit City, Electronics, Electronics giant, Liquidation
