Circuit City seeks to sell brand, Web site

RICHMOND, Va. — Circuit City Stores Inc. hopes to sell its brand, trademarks and e-commerce business to Systemax Inc., the same company that purchased electronics retailer CompUSA's intellectual property when it closed in 2008.

Richmond-based Circuit City, also a shuttered electronics retailer, has entered a so-called stalking horse agreement with Systemax for $6.5 million, according to bankruptcy court filings. A stalking horse bid is an initial offer for a bankrupt company's assets from an interested buyer chosen by the company.

The agreement also includes two and one-half years of payments to Circuit City of a portion of Systemax's revenue from the Circuit City Web site.

Port Washington, N.Y.-based Systemax manufactures and sells consumer electronics online, by direct mail and in retail stores under the TigerDirect and CompUSA brands. When it bought Dallas-based CompUSA's intellectual property in January 2008 from restructuring firm Gordon Brothers Group LLC, it also acquired some stores.

Systemax believes the transaction would "further extend its position as a leader in online retailing of value-priced, branded consumer electronics," the company said in a statement.

Other companies will have an opportunity to bid on Circuit City's intellectual property, if a federal bankruptcy court judge at a hearing Tuesday grants a motion for a May 11 auction and May 13 sale hearing.

Court filings show about 40 interested parties looked into buying the assets.

Richard L. Kaye, executive vice president of Northbrook, Ill.-based retail consulting and liquidation firm Hilco Merchant Resources LLC said Hilco and its joint venture partner Gordon Brothers still "have a very active interest" in acquiring the Circuit City assets and plan to participate in the auction.

Circuit City closed its 567 remaining U.S. stores on March 8. It has laid off about 34,000 workers since filing for Chapter 11 bankruptcy protection in November. A small staff remains at the corporate office.

The company, which posted losses in seven of its final eight quarters, sought bankruptcy protection as it faced heightened competition, pressure from vendors and waning consumer spending.

It had hoped to emerge this summer as a stronger and more competitive company, but the hobbled credit market and consumer spending cuts proved insurmountable.

Comments

[FlyTheBlueSky]

I'll make an offer on this damaged brand... $100.

[Harrier]

It's a good idea to recoup additional money to pay debtors

[loki]

I thought best buy bought circut city? At least that is what the block buster managers have been spreading around.

[independent32955]

are they going to mark that up 100% and give me a 25% discount too?

go away CC!!

[KillTheMessenger]

Systemax is better known to the consumer as TigerDirect. I shop with them regularly and have so far had a good experience. My last interaction with their call center was excellent. But do not check out through their Google merchant interface! The Google call center is staffed with poorly motivated people of limited reading skills. It's a day-night difference! The merchant does it right, the payment processor does not.

That's my personal experience, of course. Maybe I just got lucky/unlucky with the particular employees that I had to talk to.

[loki]

I was a big tiger direct loyalist fan for many years. Even before they had an internet presence. But like many other companies, they get bigger, the service falls to the side, and they started selling pure junk and not backing it up. The last think I ordered was a multi card reader. When it came it looked good, but it didnt work. When their customer service turned out to be useless I opened the product up just to see if I could find something obvious wrong. Missed connections or something simple like that, and found there was not only not a connection missing, there was nothing inside. When I tried to bring this to Tigers attention so they could check the others ( I had given up on refund or replace, I just wanted them to know and was asking for nothing) They flat out ignored me and continued to sell the product. It was then I said goodbye to tiger.

[Weathermaker]

My favorite electronics store is Microcenter - BY FAR. The only thing they can do better is their website, which it is a bit too cluttered and until you learn your way it may require a few visits. If you don't have a Microcenter in your area, Best Buy is okay I guess. Circuit City and CompUSA were bad jokes and they did deserve to go.