Circuit City Stores Inc. (Richmond, Va.) has decided to close all its stores, liquidate its assets and go out of business.
The struggling consumer electronics retailer, which has been trying since November 2008 to reorganize while under bankruptcy protection, was apparently unable to reach an agreement with its creditors and lenders.
All 567 U.S. stores will be closed and most of the chain’s 34,000 store employees will be laid off. Closing sales began this past weekend and will last until the merchandise is gone or about the end of March.
“We are extremely disappointed by this outcome,” said acting president and ceo James Marcum, but he called the liquidation “the only possible path” for the 60-year-old company.
Many bankrupt retailers have successfully reorganized, but today emerging from bankruptcy is harder than ever because of changes in the bankruptcy code and trouble in the credit markets, which are largely refusing to put new money into troubled companies.
Circuit City, which had been the second-largest consumer electronics retailer in the nation, said it will provide more details about the plans for the liquidation of the stores and other assets, the status of the company's web site and firedog services operations and the status of its Canadian operations, where it has approximately 700 stores.