Circuit City Plans to Liquidate

The Richmond, Va., company, which filed for Chapter 11 bankruptcy protection in November, said Friday that it failed to reach a transaction that will keep it in business.
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Circuit City

appears to have entered its final days after roughly 60 years of selling consumer electronics.

The Richmond, Va., company, which filed for Chapter 11 bankruptcy protection in November, said Friday that it failed to reach a transaction that will keep it in business. As a result, it will seek court approval to begin liquidating its assets.

Because of the decision, more than 30,000 people could lose their jobs. "We are extremely disappointed by this outcome," said James Marcum, vice chairman and acting president and CEO of Circuit City, in a prepared statement.

The company, he said, had been in continuous negotiations regarding an arrangement, but it wasn't able to reach an agreement with its creditors and lenders, "and so this is the only possible path" for Circuit City.

As of Dec. 31, Circuit City's domestic segment operated 567 stores in 153 U.S. markets. The international division had about 765 retail stores and dealer outlets in Canada. The company, according to its Web site, traces its beginning to 1949.

Shares of Circuit City, which previously traded on the

New York Stock Exchange

but are now on the pink sheets, were at 4 cents, down 11 cents on the day. Competitor

Best Buy

(BBY) - Get Report

was up 8.3% at $29.39, and

RadioShack

(RSH)

was adding 1.8% to $11.94.

Conn's

(CONN) - Get Report

was higher by 4.3%.

The retail sector has been an especially difficult place to succeed in recent months as the U.S. and global economies have weakened and consumer spending has slowed. This week,

Goody's Family Clothing

and

Gottschalks

filed bankruptcy petitions. Last year,

Sharper Image

and

Linens 'n Things

were among the chains that had to seek court protection from creditors.

This article was written by a staff member of TheStreet.com.