Unfortunate news today out of the world of retail as the second largest electronic retailers in the U.S., Circuit City, has announced that it's failed to find any buyers and will be forced to liquidate its 567 U.S. stores beginning as soon as tomorrow. Liquidation has to wait for approval from the U.S. Bankruptcy Court, which Circuit City requested today, reports Reuters. "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 to structure a going-concern transaction ... and so this is the only possible path for our company," said Circuit City Vice Chairman James Marcum.
Circuit City filed for Chapter 11 bankruptcy protection back in November and closed down 155 stores. The company's stock has continued to decrease -- as it has for the most part since late 2006 -- and currently sits at $0.04, a drop of 74.33%, as of 2:49pm EST.
At this point, Best Buy seems to be reaping the rewards. Circuit City's main rival has seen an 8.22% boost in its stock prices today up to $29.54, as of 2:46pm EST. FTN Midwest Securities analyst Anthony Chukumba believes that the Circuit City closure could hurt Best Buy in the ensuing months (likely due to the inevitable clearance prices) but following that, Best Buy should begin seeing 30% of Circuit City store sales.
Our best goes out to the many who will be laid off as a result of the bankruptcy.
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