With Its Inventory Gone, Circuit City To Close All Stores for Good by Sunday
Friday, March 6, 2009
All of Circuit City's stores will close for good by Sunday, powering down what once was the nation's second-largest consumer electronics retailer, its liquidators said.
"Consumers reacted to the top-quality product that they had, and the prices we were able to sell it at, and we're basically running out of inventory a week early," said Scott Carpenter, vice president for Great American Group, which has been managing Circuit City Stores' going-out-of-business sales.
After it failed to find a buyer or secure refinancing under Chapter 11 bankruptcy protection, Richmond-based Circuit City announced in January that it would liquidate its remaining 567 U.S. stores and lay off about 34,000 employees. Great American, SB Capital Group, Tiger Capital Group and Hudson Capital Partners have been working since January to sell off Circuit City's remaining $1.7 billion worth of inventory at reduced prices.
Almost all of it has sold, and nothing will remain when the stores close, Carpenter said.
A small staff will remain at the corporate office after Sunday to finish winding down the company.
Circuit City is guaranteed to receive at least 70 percent of the proceeds from the liquidation sales, but the final figure may exceed that amount, according to an agreement filed with the U.S. Bankruptcy Court.
The company is trying to auction leases for its remaining stores, corporate headquarters, and distribution and service centers. It has the court's permission to break the leases if no buyers turn up.
Circuit City also received approval to pay more than 150 employees as much as $4 million to stay with the company as it winds down, which the company said would increase its value by $250 million.
To help pay down its debt, the company also has sold pallets of defective inventory, its two corporate jets and the furniture, fixtures and equipment from its headquarters and distribution and service centers over the last month.