Two months after filing for Chapter 11 bankruptcy, Richmond, Va.-based electronics retailer Circuit City Stores Inc. announced it is going out of business.
The company, which was in business for 60 years, operated two stores in Westchester County with locations at 750 Central Park Ave. in Yonkers and 220 Main St. in White Plains. In the Hudson Valley, there are stores on Route 9 in Poughkeepsie, Palisades Center in West Nyack and Dunning Road in Wallkill.Â
According to the company”™s Web site, the chain will close “due to challenges to our business and the continued bleak economic environment.” The company’s assets will be liquidated to pay off creditors.      Â
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“We had hoped to be able to emerge from Chapter 11 bankruptcy protection as a stronger, more competitive company and we made significant progress during the reorganization to improve our business. Unfortunately, the economic climate is so poor that we have no choice other than liquidation,” the Web site stated.
“It was a somewhat anticipated announcement,” said Michael Stone, senior director of retail services of the New York office of Cushman & Wakefield on Circuit City”™s closing. “They have been struggling to compete with Best Buy in particular.”
Stone said Westchester has traditionally been under-retailed, “so it may pose an opportunity for retailers who have been priced out of the market or restricted from the market due to lack of space.”
Or, “we may have a glut of available inventory, but I am not sure we will get there. You may see the vacancies sit on the market for awhile.”
Stone said Circuit City”™s average box size of 25,000 feet means the space can be used by a number of different retailers.                      Â
Michael Rao, president of New York Commercial Realty Group in White Plains, said companies are scouting the market but holding off on leasing new space.
“In order for Circuit City’s space ”“ and other retail or office space that has been on the market for more than four months ”“ to be leased or show real interest, owners need to offer six months free rent on five-year deal and one year free rent on 10-year deal,” Rao said. Liquidators have already begun arriving at the chain”™s 567 stores across the country.                                                 Â
According to the company Web site, closing sales will run as long as it takes to sell existing inventory, but are expected to wrap up by the end of March. When the liquidation sales are completed, the stores will be closed. Circuit City employs approximately 34,000 associates in the United States.                                                                                 Â
“We are extremely disappointed by this outcome,” said James A. Marcum, vice chairman and acting president and chief executive officer for Circuit City. “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 timeframe available, and so this is the only possible path for our company.” Â
As of Dec. 31, 2008, the international segment operated approximately 765 retail stores and dealer outlets in Canada. The company”™s Canadian operations, which employ approximately 3,000 associates, will continue and are not affected by the liquidation of Circuit City’s U.S. operations.Â
