The parent company of CompUSA and Tiger Direct is moving in on the now-defunct retail chain Circuit City, likely purchasing its trademarks and Internet domain names.
Bloomberg reports that Systemax will be a "stalking-horse bidder" for $6.5 million -- chosen by Circuit City to make the first bid at a May 11 auction. Circuit City has asked a court judge to approve the high bid on May 13. "The sale of the intellectual property and Internet assets would bring significant recovery for the sellers’ estates and creditors,” Circuit City said in a filing.
This wouldn't be the first time Systemax has brought a dead company back to life. Last year, the firm spent $30 million to buy the CompUSA name after the retail chain filed for bankruptcy and closed most stores. Since then, the firm has renamed several Tiger Direct locations to CompUSA and is pushing a new try-before-you-buy strategy.
Circuit City had searched for a buyer in its final days earlier this year, but failed to find anyone who would take on its $2.3 billion in debt. By waiting until after liquidation, Systemax can get all the benefits of the brand name -- tarnished as it may be -- without any of the baggage of a dying company. With an existing inventory of tech products, Systemax probably won't have to do much work to set up an online store under the Circuit City name.
For over a week now, Circuit City has hinted at its rebirth. A note on the store's website says it is "temporarily closed, though we anticipate the website will reopen in the coming weeks."
