January 9th, 2009
Circuit City in talks for sale; Best Buy narrows its fiscal 2009 targets
Circuit City said Friday that it is in talks with “two highly motivated and interested parties” about selling the company as a going concern. Meanwhile, Best Buy, the largest electronics retailer in the U.S., reckons it continues to take market share.
Circuit City asked the bankruptcy court to approve procedures that officially would sell Circuit City in total, by business units or by assets such as inventory.
In a statement, Circuit City said:
These interested parties are considering providing additional financing to allow the company to sustain operations and move forward with a subsequent restructuring through a stand-alone plan and/or purchasing the company or all or substantially all of the company’s assets. The parties have substantially completed due diligence and now are in negotiations with the company and the company’s major stakeholders in order to finalize such a transaction. While the company is optimistic that a transaction can be successfully finalized, no assurance can be given that this will occur.
If these transactions don’t occur by Jan. 16, Circuit City could liquidate.
Separately, Best Buy narrowed its financial outlook. Best Buy on Friday said its holiday revenue was in line with revised expectations, but same store sales fell 6.5 percent.
The electronics retailing giant made the announcement at the Consumer Electronics Show.
By the numbers:
- Revenue was up 4 percent for the month ending Jan. 3 to $7.5 billion, in line with expectations.
- Best Buy narrowed its earnings targets. The company is predicting fiscal 2009 earnings to be $2.50 to $2.70 a share, excluding a $111 million investment impairment charge. The company had projected 2009 earnings between $2.30 and $2.90 a share.
- The company will take a fiscal fourth quarter charge of $60 million for its voluntary severance program.
Here’s the breakdown of sales by category:
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
For daily updates, follow Larry on Twitter.
Subscribe to Between the Lines via Email alerts or RSS.
