Circuit City Plans to Liquidate

Retail woes continue for Circuit City, with the latest reports all but confirming that there is no light at the end of the tunnel for the retail giant.

According to CNN and MSNBC reports, Circuit City requested approval in its latest court filing to liquidate all of its remaining assets.  If approved, Circuit City will move forward with plans to close the 567 retail locations remaining in the US.  The grim news comes just after Circuit City filed for bankruptcy protection in November of 2007, and then closed one hundred and fifty under-performing stores.

In Friday's official press release to investors, Circuit City's acting chief executive James A. Marcum stated, "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."  

Negotiations with several potential buyers of the company are reported to have broken down, primarily due to the credit crisis and economic state.  With no buyer in sight, Circuit City's options ran out, especially with reports that several vendors were not willing to continue to sell product to the financially troubled company. 

Among the 30,000 employees affected, common equity shareholders have been advised that no value is expected to remain after the liquidation.  Furthermore, shopping mall owners are expected to also take a hit, with the average Circuit City store leasing out an average of 20,000-25,000 square feet. 

Details regarding liquidation plans, Firedog service, Canadian operations, website operations, and bankruptcy proceedings should become available soon. Once again, deal-hunters should keep an eye out for special sale events, some of which may begin as soon as this Saturday.  In the last round of store closures, Circuit City stores that were designated to be closed were able to transfer their top tier stock to stores that were to remain open, however this will obviously not be an option for the retail giant this time around.

Out condolences go out to anyone affected by the collapse of Circuit City.