Circuit City was once one of the main electronics retailers in the U.S. Based in Richmond, Va., the company can trace its history back to 1949, and dominated the electronics space up until the 1990s. In its heyday, Circuit City had 1,520 stores across the U.S. and Canada, with 46,000 employees.But the company faced increasing pressure from Best Buy, big-box stores like Walmart, and online sales from Amazon. After a series of failed strategy changes, the company ultimately filed for bankruptcy in 2008 and closed its doors the following year. Circuit City left a pile of assets after its demise, to the tune of $3.4 billion. After teasing a major announcement last week, Circuit City CEO Ronny Shmoel announced during a press conference at the 2018 …show more content…
KB Toys filed for bankruptcy in December and is liquidating stores. Department store chains Goody's Family Clothing and Gottschalks Inc. both filed for bankruptcy. Goody's plans to liquidate, while Gottschalks hopes to reorganize. Industry experts expect more bad news in the coming months as spending likely will deteriorate further.The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved …show more content…
But the company couldn't secure the necessary financing or support from vendors.Some employees were notified Friday that they would lose their jobs and certain stores would begin close-out sales as early as Saturday.U.S. Bankruptcy Judge Kevin Huennekens gave final approval to the liquidation plan."This is a very sad day for management, the employees, customers and the community," the judge said.Shareholders are likely to receive nothing, as is typical in bankruptcy cases. Circuit City said in court papers it has appointed Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC as liquidators. They will pay a 70.5 percent return on merchandise.It was unclear what would happen to the company's 765 retail stores and dealer outlets in Canada. Galardi told a judge there are still bids for the Canadian business."Very, very sad," said Alan L. Wurtzel, the son of company founder Samuel S. Wurtzel, and the chief executive from 1972 to 1986, board chairman from 1986 to 1994 and vice chairman until 2001. "I feel particularly badly for the people who are employed or until recently were employed."Wurtzel has previously said Circuit City didn't take the threat of rival Best Buy Co. seriously enough and, at some points, was too focused on making a profit in the short term instead of building long-term value.Credit Suisse analyst Gary Balter told investors