New York City Bankrupt retailer Circuit City Stores said on Friday it will liquidate its assets after it failed to reach a deal with creditors and lenders regarding a potential sale of the company.
"We are extremely disappointed by this outcome. The company had been in continuous negotiations regarding a going concern transaction. 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 in the limited time frame available, and so this is the only possible path for our company," said James A. Marcum, vice chairman and acting president and CEO, Circuit City Stores, Inc.
Circuit City filed for Chapter 11 protection in November, citing a deteriorating cash position and tighter terms from vendors. It has liquidated and closed 155 stores, and now has about 567 U.S. stores.
Circuit City will ask the court for approval to close its remaining 567 stores and sell all its merchandise. The company said the sale would begin Saturday and run until March 31, pending court approval, Reuters reported.
The chain has struggled behind Best Buy Inc. and faced increased New York City competition from other store chains, such as discounter Wal-Mart Stores Inc. Best Buy shares rose 1.5% on Friday after the Circuit City announcement.
Last week, the retailer received bankruptcy court approval to proceed with an auction to sell the company. At the time, Circuit City said it was in talks with two undisclosed parties that could either buy the company or provide additional financing.