Mega retailer Cicuit City has requested court approval to shut down its remaining 567 stores in the United States.
The shocking announcement was made today (January 16).
After failing to secure financing from creditors and lenders, bankrupt electronics vendor Circuit City Stores Inc. said Friday it will liquidate due to the economic downturn. The liquidation will affect more than 30,000 employees, adding to the rising number of U.S. job losses, which last year hit their highest level since World War II. (Market Watch)
Circuit City executives have confirmed the mass store closings.
“We are extremely disappointed by this outcome,” James Marcum, acting CEO for Circuit City, said in a statement. “We were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company.” (CNN)
The company was once known as the largest electronics retailer in the nation.
Based in Richmond, Virginia, Circuit City was the biggest electronics retailer in the U.S. until the mid-1990s. The company lost market share to Best Buy Co. and Wal-Mart Stores Inc. while Amazon.com Inc. and other online retailers undercut it with lower prices. In November, the company filed for bankruptcy, saying it planned to reorganize and exit court protection as a going concern. (Bloomberg)
The news comes in the same week that New York City’s Virgin Mega Store announced its closing.
The store is being closed because its current owners can lease the space more profitably to another tenant. Virgin paid just $54 per sq ft in rent for the location, whereas the market rent in the area was about $700. Virgin has been the only major music chain in New York since 2004, when Tower Records declared bankruptcy and HMV pulled out of the US market. (BBC)