Today marks the official death of Circuit City Stores, Inc. All hopes of reviving or saving all or part of the company are gone. The company is now officially seeking approval from the U.S. Bankruptcy Court to liquidate its assets. We held little to no hope for Circuit City for some time. There were many problems at Circuit City not seen at other failed retailers.
We criticized former CEO Schoonover endlessly as hisefforts were wrong every step of the way. If you are looking for blame, you don’t need to bother blaming a recession, competitive pressure or the move to lower-end technologymerchandise. Schoonover ran this ship ashore. Over and over. And over. This was not Wal-Mart and it was not Best Buy. It was Schoonover and his underlings that went along with the plans.
There will now be some 30,000 new jobless claims added to the list overthe next few weeks. The company noted, "We are extremelydisappointed… we were unable to reach an agreement with our creditorsand lenders to structure a going-concern transaction in the limitedtimeframe available… this is the only possible path for our company."
Circuit City said that it will offer more details about the liquidationof the stores and other assets, the status of the company’s Web siteand firedogSM services operations, and more.
This is a statement from the Land of Duh as is the case in mostbankruptcies or liquidations, but the company did confirm that therewill likely be ZERO value left over for the stockholders.
We would advise ANY COMPANY OR ORGANIZATION to not consider Mr.Schoonover as a candidate to lead any future company. Not unless theyown a lot of put options.
Jon C. Ogg
January 16, 2009