Circuit City to liquidate remaining US stores
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By MICHAEL FELBERBAUM and VINNEE TONG
The Associated Press
Friday, January 16, 2009
Circuit City Stores Inc., the nation's second-biggest consumer electronics retailer, said Friday it had run out of options and will be forced to liquidate its 567 U.S. stores. The closures could send another 30,000 people into the ranks of the unemployed.
"This is the only possible path for our company," James A. Marcum, acting chief executive, said in a statement. "We are extremely disappointed by this outcome."
Timeline of Circuit City Stores Inc.
A look at the history of consumer electronics retailer Circuit City Stores Inc.:
1949: Samuel S. Wurtzel opens first Wards Company retail store in Richmond, Va.
1961: Makes first public offering with Stein Brothers & Boyce Co. of Baltimore. Offers 110,000 shares at $5.375 per share (split adjusted, 2 cents per share).
1968: Moves from the over-the-counter market to the American Stock Exchange. Offers 1,700 shares at $19.75 per share (split adjusted, 55 cents per share).
1969-1982: Company acquires numerous electronics retailers and operates stores from New York to California.
1984: Company name changes to Circuit City Stores Inc.; Stock listed on the New York Stock Exchange.
1987: Sales reach the $1 billion mark for the fiscal year ending Feb. 28, 1987.
1989: First personal computers hit Circuit City store shelves.
1990: Sales reach the $2 billion mark for the fiscal year ending Feb. 28, 1990.
1993: Begins testing CarMax, a retail venture selling used vehicles.
1996: CarMax announces plans for national expansion of the concept.
1999: Circuit City launches Web site to offer online shopping; annual sales for Circuit City store businesses exceed $10 billion and annual sales for CarMax superstores exceed $2 billion.
2000: Circuit City exits the appliance business.
2002: Circuit City completes the separation of CarMax.
2003: The company rejects takeover bid from Mexican financier Carlos Slim Helu.
2004: Circuit City acquires Ontario-based consumer electronics retailer InterTAN Inc.
2005: Company rejects unsolicited $3.25 billion cash buyout offer from Boston investment firm Highfields Capital Management LP
2006: Circuit City launches Firedog, a PC services and home-installation business.
2007: Circuit City announces plans to explore strategic alternatives for InterTAN Inc.; lays off about 3,400 retail employees and replaces them with lower-paid workers.
April 2008: Dallas-based movie-rental chain Blockbuster Inc. makes public a more than $1 billion takeover bid for Circuit City with dreams of creating a huge chain that would sell electronic gadgets and rent movies and games.
May 2008: Circuit City's board of directors authorizes the exploration of strategic alternatives to enhance shareholder value; Opens books to Blockbuster.
June 2008: Circuit City reaches agreement with shareholder Wattles Capital Management to nominate three directors, including James A. Marcum to its board to defuse proxy battle.
July 2008: Blockbuster withdraws takeover bid, citing market conditions.
August 2008: Marcum named vice chairman.
Sept. 22, 2008: Philip J. Schoonover steps down as Circuit City's chief executive, chairman and president; Marcum named as interim president and chief executive.
Sept. 29, 2008: Circuit City withdraws its outlook for the full year and posts a wider second-quarter loss as sales fell 10 percent; Shares fall more than 20 percent.
Nov. 3, 2008: Circuit City says it will close 155 stores in 55 U.S. markets by Dec. 31, laying off about 17 percent of its domestic work force.
Nov. 7, 2008: Circuit City lays off about 700 employees at its headquarters.
Nov. 10, 2008: Circuit City files for Chapter 11 bankruptcy protection.
Jan. 16, 2009: Circuit City announces plans to liquidate.
- The Associated Press
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The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable. And bleak holiday sales results further weakened even the stronger retailers.
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.
"Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders," Marcum said.
Shareholders are likely to receive nothing, as is typical in bankruptcy cases. It was unclear what would happen to the company's 765 retail stores and dealer outlets in Canada.
Circuit City filed for Chapter 11 bankruptcy protection in November as vendors started to restrict the flow of merchandise ahead of the busy holiday shopping season.
It had been exploring strategic alternatives since May, when it opened its books to Blockbuster Inc. The Dallas-based movie-rental chain made a takeover bid of more than $1 billion with plans to create a 9,300-store chain to sell electronic gadgets and rent movies and games. Blockbuster withdrew the bid in July because of market conditions.
Circuit City, which said it had $3.4 billion in assets and $2.32 billion in liabilities as of Aug. 31, said in its initial filings that it planned to emerge from court protection in the first half of this year.
Under court protection, Circuit City has broken 150 leases at locations where it no longer operates stores. The company already closed 155 stores in the U.S. in November and December.
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