The 60-year-old electricals retailer said its assets will be liquidated to pay off creditors, after failing to find a buyer by January 16. It filed for Chapter 11 bankruptcy protection – the US equivalent of administration – in November.
The retailer blamed “challenges to our business and the continued bleak economic environment” for the collapse.
Shoppers flocked to the closing down Sales that started this week, in scenes reminiscent of the final days of Woolworths in the UK.
Sales at Circuit City had fallen for the past two years, as it lost out to rivals Best Buy and Wal-Mart. The slump in consumer spending following the global downturn sealed its fate.
Vice-chairman and acting president and chief executive James Marcum said he was “extremely disappointed” by the outcome.
Two potential bidders for the retailer reportedly included Mexican billionaire Ricardo Salinas and private equity vehicle Golden Gate Capital.
Pali International US retail analyst Stacey Widlitz said Circuit City’s liquidation is a “positive” for Best Buy. She added that in the short term the liquidation will put pressure on Best Buy’s margins, but in the long term “simply not having Circuit around will allow Best Buy to gain share”.
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