Circuit City will be liquidating all remaining stores and closing operations after failing to locate financing or a buyer. Currently, Circuit City has 567 stores, including the one on Green Bay Road in Racine.
“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.”
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.
Circuit City will join the ranks of Steve & Barry’s, Linens N Things, K B Toys and others who are shutting down operations across the United States. All of those closing isn’t good news to the real estate market, either.
The liquidation is the latest big blow to the nation’s malls, which have suffered from a rise in vacancies as a slew of chains from Mervyns LLC to Linens ‘N Things have liquidated. But analysts say that the demise of Circuit City, whose stores range in size from 20,000 to 25,000 square feet, will hurt the fortunes of mall operators even more.
“It will bring to market a glut of big box spaces across the country,” said John Bemis, head of Jones Lang LaSalle Inc.’s retail leasing team. “It will have one of the largest impacts on big box real estate across the country.”
Wonder if Regency Mall regrets terminating leases and/or relocating tenants to accommodate not one but two retai8lers who promptly went out of business — Linens N Things and Steve & Barry’s. The JC Penney wing of Regency Mall is empty except for JC Penney.
Of course, they could do what two other prominent retailers, Montgomery Ward and Builders Square, have done: become strictly online retailers.
