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[UPDATE]Circuit City Officially For Sale?

Posted by Mehar Gill on January 10, 2009 
Filed Under: Circuit City, Format War, Retailers



Word from an inside source at Circuit City is the company has until January 16, 2009 to find a buyer or they will be up for liquidation. This comes months after filing for chapter 11 bankruptcy in November of 2008. We also assume this may affect The Source, the Canadian branch of Circuit City if these rumors hold any truth to them.

Keep in mind since this comes from a “inside source” it is still considered a rumor and for all we know could be completely false. If your one to dance on graves, expect to see products at significantly reduced prices if Circuit City is unable to find a buyer. We believe the term worth “more alive than dead” applies, although with the state of the world economy that saying may hold little value.

[Via Loot Ninja]

[UPDATE] It seems these rumors are true according to a press release, Circuit City states they are in talks with two parties to “secure funding”,

Presently, the company is engaged in significant discussions, meetings and negotiations with two highly motivated and interested parties concerning the terms of a going concern transaction. These interested parties are considering providing additional financing to allow the company to sustain operations and move forward with a subsequent restructuring through a stand-alone plan and/or purchasing the company or all or substantially all of the company’s assets. The parties have substantially completed due diligence and now are in negotiations with the company and the company’s major stakeholders in order to finalize such a transaction. While the company is optimistic that a transaction can be successfully finalized, no assurance can be given that this will occur.

A buyout/merge? Or a new source of funds?

Related posts:

  1. Circuit City to Liquidate US operations, Canadian Stores Unaffected
  2. Circuit City R.I.P. March 8th, 2009
  3. Sony To Launch Video Download Service

Comments

11 Responses to “[UPDATE]Circuit City Officially For Sale?”

  1. Joel Schaffer on January 10th, 2009 3:44 pm

    Maybe Circuit City should have been a little more agreeable with Blockbuster back when Blockbuster was offering to merge with them………

  2. Mehar Gill on January 10th, 2009 5:11 pm

    @Joel Schaffer – Blockbuster was in the same boat, all retailers that rely solely on on a VHS/DVD/Blu Ray/HD DVD, etc system are looking for other means to future proof against what many call the “digital future”.

  3. The Guardian on January 11th, 2009 6:43 am

    The Source in Canada still makes money… I’d imagine they could find a buyer for that (Radio Shack perhaps, just for some irony?) without liquidating the whole chain.

  4. Mehar Gill on January 11th, 2009 8:51 am

    @The Guardian – If that were the case I think this rumour would lose a whole lot of credibility, wouldn’t CC have sold the source to payback their debt? The Source could probably fetch a ton of money which definitely would have helped.

  5. Ryan on January 11th, 2009 12:07 pm

    @ Mehar Gill

    I think it’s come to an abondonment of people shopping at their stores – after it leaked they fired all those employees (the top 15% of the hourly workers – aka their experienced help) to reduce spending, consumers stopped shopping there.

    Never underestimate the power of people.

  6. The Guardian on January 11th, 2009 6:57 pm

    @Mehar Gill – So they should sell all their profitable stores and burn through the capital at the unprofitable ones?

    Besides if I’m not mistaken, under Chapter 11 Bankruptcy they can’t dispose of any significant assets without court approval.

    Plus even if they WERE for sale, they’d have to find a buyer.

    Finally, it isn’t over yet… if liquidation is ordered by the court, they could order the entire Canadian operation sold rather than liquidated, or spun off as a separate company with shares split amongst the creditors, or something like that.

  7. Mehar Gill on January 11th, 2009 7:11 pm

    @The Guardian – Yea that’s the point, it wasn’t that the CC stores in America were unprofitable, bad business decisions are to blame. A new lease at life usually convinces companies to change their ways.

    I’ll have to take your word on the Chapter 11 thing since I don’t know enough about it to comment. Regardless, if that is indeed the case it will just make it longer, if The Source is really a profitable source (excuse the pun) of income their would indeed be buyers.

    If the new “source” pulls through I don’t think we need to worry about liquidation, just a few days left regardless. It would be a shame to see Circuit City and assets go, I prefer them over the alternatives when applicable. Of course when such things are “leaked” people tend to hold of on purchases and wait for the “fire sale”, happened with HD DVD as well.

  8. Ryan on January 12th, 2009 12:24 pm

    We couldn’t get a newer image up, the guy is buying a PS2, which is hilariously dated. I can’t stop focusing on that honestly; good find!

  9. Mehar Gill on January 12th, 2009 12:26 pm

    @Ryan

    I didn’t even notice, I just took what ever we had in our library! :p

  10. The Guardian on January 12th, 2009 7:41 pm

    They still make and sell PS2s anyway so maybe it’s not out of date? :p

  11. Mehar Gill on January 12th, 2009 7:42 pm

    I’ll whip something up just for this week’s special announcement, much like Warner I might make two different version! ;)

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