Two decades after Circuit City moved into the Tampa Bay area as the nation's largest and fastest-growing consumer electronics chain, it's pulling the plug.
It became the largest retailer to fall victim to the expanding financial crisis Friday, announcing it will shut down its remaining 567 U.S. stores at the cost of 34,000 more jobs after failing to sell the business. It means hundreds more out of work in the Tampa Bay area, where Circuit City Stores Inc. has eight stores, four in Tampa alone.
It was summer 1989 that Circuit City opened the doors to its first three bay area stores. Over the years the Richmond, Va., chain expanded to more than 50 stores throughout Florida. At that time, the stores' sheer massiveness — likened to neighborhood grocery stores — set a precedent for electronic retailers.
In the years since, the iconic red and white stores have shrunk in size, as have their sales. In the last year, the foundering electronics chain fought through bankruptcy keep its doors open.
The closure of what is now the nation's second-biggest consumer electronics retailer spells more trouble for the nation's malls, and is the latest casualty of an unprecedented pullback in consumer spending that has claimed Sound Advice, KB Toys, Mervyns LLC and Linens 'N Things.
The hedge fund that owned Sound Advice, a Florida-bred electronics retailer with 22 stores, abruptly pulled the rug out on customers and 50 employees in December, shutting the chain down before the scheduled ending of its liquidation sale.
Circuit City had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable.
"Very, very sad," said Alan L. Wurtzel, son of company founder Samuel S. Wurtzel and himself a former chief executive of Circuit City. "I feel particularly badly for the people who are employed or, until recently, were employed."
Circuit City's brand value was diminished in the 1990s as it faced tougher competition from Best Buy Co., which built bigger stores in better locations.
Circuit City's failed turnaround efforts included laying off higher-paid employees, opening smaller concept stores, seeking potential buyers, changing management and closing stores. In 2007, it laid off about 3,400 store workers and replaced them with lower-paid employees.
Two potential buyers considered a shrunken form of the business, retaining as many 350 stores or as few as 180. But Circuit City couldn't secure the necessary financing or support from vendors.
U.S. Bankruptcy Judge Kevin Huennekens gave final approval to the liquidation plan Friday afternoon. It was unclear what would happen to the company's 765 retail stores and dealer outlets in Canada.
The liquidation of Circuit City follows the worst holiday shopping season since at least 1969. People have slashed their spending as they worry about their job security and declining retirement funds. Already this week, department store chains Goody's Family Clothing and Gottschalks Inc. filed for bankruptcy protection.
Staff writers Nicole Hutcheson and James Thorner contributed to this report, which included information from the Associated Press and Times files.