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The electronics retailer was unable to find a buyer or come up with any other exit plan and on Friday, executives announced it would liquidate, close its 567 U.S. stores, and leave 30,000 without jobs.
Stores to close include those in Wilkes-Barre Township and Dickson City.
Approximately 45 people at the Wilkes-Barre Township store will lose their jobs, employees said. They did not know when the store would close.
The manager on duty declined further comment, referring all other inquiries to corporate headquarters.
"This is the only possible path for our company," Circuit City's acting Chief Executive James A. Marcum said in a statement. "We are extremely disappointed by this outcome."
The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable. Negotiations for an acquisition went past midnight on Thursday, Circuit City lawyer Gregg Galardi said in court.
Two buyers -- Mexican billionaire Ricardo Salinas Pliego, who controls a chain of electronics stores in Latin America, and the Golden Gate Capital private equity firm -- had been looking to buy the company in a shrunken form, with either 350 stores or as few as 180 stores. But the company couldn't secure the necessary financing or support from vendors.
Shareholders are likely to receive nothing, as is typical in bankruptcy cases. Circuit City said in court papers it has appointed Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC as liquidators. They will pay a 70.5 percent return on merchandise.
"I guess Best Buy is going to own the Wilkes-Barre/Scranton market now," said Justin McKenna, of Shavertown, who stopped at the Wilkes-Barre Township store on Friday. "It's a pity to see one store with a monopoly."
McKenna always preferred Circuit City to arch rival Best Buy. He enjoys the calm shopping atmosphere.
About 15 to 20 customers browsed through the barren shelves at the Wilkes-Barre Township store, looking for deals. Many had heard the news, and were looking to see what merchandise interested them.
Irene Filippini, of Plains Township, looked for DVDs as she and her husband scrambled to use a gift card they received for Christmas.
"Everything is so awful with the economy. It's scary," she said. "I think people are still afraid to buy because you don't know what's going to happen."
At Circuit City in Dickson City, a handful of customers perused the thinning shelves of merchandise as employees huddled, discussing the store's rise and fall and the fate of other retailers.
Charles Rose of Moosic was alone among the big-screen televisions with expectations of purchasing one before the Super Bowl. He knew the store was in trouble, but wasn't aware that the company would liquidate and go away. Nevertheless, he said he wouldn't mind buying something from the store, since the warranty is from the manufacturer, not the retailer.
Until recently, Circuit City had been a retail success story in the electronics marketplace. But the balance of power between Circuit City and Best Buy began to shift three years ago, when Circuit City executives announced they were eliminating their experienced, commissioned sales staff, said Britt Beamer, a retail analyst with America's Research Group.
"That move told customers not to come back," he said. "It may be dumbest move I've seen in retailing."
Damien Blanchard, of Kingston, worked at Circuit City for six years. He left shortly after the commissioned sales staff was cut. He stopped by the Wilkes-Barre Township store on Friday to check on his former colleagues.
Cutting the commissioned sales staff was the beginning of the end for Circuit City, said Blanchard, because 3,500 jobs were lost and many incentives were gone. There was no reason to go the extra mile for the customer.
"There are 30,000 people that depend on this place. You don't kill a company like this in a year," he said.
Circuit City couldn't beat Best Buy, which Beamer said was more innovative, better operated and held onto appliances. Shares of Best Buy Co. rose $2.44, or nearly 9 percent, to $29.58 in afternoon trading.
"A happy appliance customer is a loyal customer," Beamer said.
Circuit City is the latest casualty of an unprecedented pullback in consumer spending that has driven other brands such as KB Toys, Mervyns LLC and Linens 'N Things into bankruptcy. Experts believe there will be more to come.
By David Falchek and Heidi Ruckno
The Associated Press contributed to this report.
hruckno@citizensvoice.com, 570-821-2109
dfalchek@timesshamrock.com
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