Circuit City employees gather outside the Union Square electronics store as it closes on the final day of business Sunday, March 8, 2009 in New York. The chain closed 567 stores nationwide, leaving more than 34,000 employees jobless.
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 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.
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.