Circuit City, the second-largest consumer electronics chain in the U.S., will liquidate and close all of its 567 U.S. stores, court papers revealed today.
The company couldn't reach an agreement with creditors and lenders to keep itself going, and no buyers were interested in picking up the chain. Circuit City is now a small step away from its undoing, as federal bankruptcy court must still give final approval to the liquidation. Roughly 30,000 employees will lose their jobs.
In Canada, 765 stores with about 3,000 employees will remain in operation.
Circuit City was on life support since November, when it filed for Chapter 11 bankruptcy. Suppliers began to slow their shipments when it became clear that the retailer couldn't pay for them. Notably, Gizmodo reported that Sony canceled a shipment mid-transit, causing supply trucks to literally turn around.
When all of this came to light, Time ran an interesting piece on why Circuit City failed, pinning the blame on bad management. It was a combination of poor real estate decisions, a lack of web and gaming presence and poor customer service, the article said. A backlog of inventory led to massive debts, which in turn started this whole mess.
For simple purchases like CDs, however, Circuit City offered a healthy selection and competitive prices. The store also did become gamer-friendly in its later years with great deals on older games. It's sad to see the chain disappear.
On the bright side, there will be plenty of deals when the liquidation begins on Saturday.
