Circuit City is circling the drain

[Caedus]

http://money.cnn.com/2009/01/09/news/companies/circuit_city/?postversion=2009010912

NEW YORK (CNNMoney.com) -- Troubled retailer Circuit City said Friday that it has until the end of next week to reach a deal with "interested" parties to help it stay in business or else it may have to start liquidating.

"Circuit City is coming up against a very hard deadline," said Justin MacFarlane, director with turnaround firm AlixPartners. "If they can't find a buyer [then] there's a real risk of the company going out of business."

Circuit City, the No. 2 electronics seller after Best Buy (BBY, Fortune 500), filed for bankruptcy protection last November.

At the time, the retailer announced it would close 155 stores as part of an effort to stay alive, but would remain a going concern while it tried to restructure under bankruptcy protection.

On Friday, Circuit City said in a statement that it filed a motion with the bankruptcy court on Jan. 5 to seek approval to put the company up for sale "as a going concern, as separate business units or as individual assets - including the sale of inventory."

The company said it is in negotiations with two "interested" parties who may either buy the company or provide additional financing to allow it to continue with its restructuring process.

However, Circuit City said that if no agreement is reached by Jan. 16 and it fails to obtain an extension to its debtor-in-possession financing (DIP) credit agreement deadlines, then the company may start to liquidate its assets.

Joseph Steinfeld, bankruptcy expert and managing partner with ASK Financial, said it's likely that Circuit City will get an extension past next week on its DIP financial agreements.

"If that doesn't happen and these deals fall through, then it is very likely that it could go out of business," he said. "It's the same exact situation that confronted Linens N Things and the company was forced to liquidate."

:shock:

It looks like CC might be fucked.

 

[Volpone]

Huh. I mentioned elsewhere that Circuit City was one of the cases studied in "Good to Great", so that is a little interesting.

My other thought is, growing up on Northwestern Wisconsin, if you needed electronics you went to Best Buy. Later if I needed computer stuff I went to CompUSA. So Circuit City really didn't have any clear positioning that made me a customer.

Later, after CompUSA started to suck (are they even in business anymore?) I found Circuit City was a pretty good place to go for my computer stuff.

 

[Eggs Mayonnaise]

CompUSA closed their stores but still operates as an online store.

I just bought some blank DL DVDs at the Circuit City around the corner from work last night. I'd never been in there before. Now I'll have to check it out to see if I can pick up some bargains in the next few weeks.

The Best Buys around here suck. We also have PC Richards and J&R to fall back on.

 

[Volpone]

Fry's is good if they have them around you. But they're definitely more for a savvy tech-geek. I built the computer I'm typing on right now at a Fry's--the first machine I ever built. I grabbed a shopping cart and headed for the back of the store: "Hmm...I'll need a case. And a board. And a processor. Power supply...I/O devices..." I got to the checkout with all the parts for a computer--including monitor, mouse, and keyboard--and the guy goes "Looks like you forgot to get RAM. I've got some over here that'll work with that board."

Very cool.