Sales Begin at Circuit City
By: Austin Kellerman/CNN
Updated: January 17, 2009
Circuit City Stores Inc., the bankrupt consumer-electronics chain, starts going-out-of- business sales at its Abilene and 566 other U.S. stores today. This marks the beginning of the end for a retailer that began selling televisions in 1949. Revenue declines that started when Best Buy Co. and Wal- Mart Stores Inc. began offering TVs and computers at lower prices deepened as the U.S. entered a recession and vendors demanded that Circuit City pay up front for their goods. On Nov. 10, the Richmond, Virginia-based chain filed for bankruptcy protection after suppliers cut off credit.
At the time, Circuit City, which employs more than 30,000 people in the U.S., planned to continue operations after exiting Chapter 11. Negotiations with prospective buyers failed, and yesterday the company said it had agreed to hand its U.S. merchandise to a group of liquidators.
Great American Group WF LLC; Hudson Capital Partners LLC; SB Capital Group LLC; and Tiger Capital Group LLC won the liquidation rights in a court-sanctioned auction. Circuit City estimated the value of its inventory at $1.2 billion to $1.3 billion, and creditors are guaranteed 70.5 percent. Stockholders will probably get nothing, Circuit City said in a statement.
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