November 5, 2008 / 10:37 PM / 9 years ago

UPDATE 1-Circuit City brings liquidation firms on board

NEW YORK, Nov 5 (Reuters) - Electronics retailer Circuit City Stores Inc (CC.N) entered into an agreement with two liquidation firms to handle all but one its planned 155 store closures and liquidation sales as it mulls options to restructure.

The liquidation firms, Hilco Merchant Resources and Gordon Brothers Retail Partners, would pay it an amount equal to 72 percent of the cost value of merchandise included in the liquidation sales, Circuit City said in a filing with the U.S. Securities and Exchange Commission on Wednesday.

The liquidation firms will get an agent’s fee equal to 3.5 percent of cost value of the merchandise, Circuit City said.

    Earlier this week, Circuit City said it would cut 17 percent of its U.S. workforce, as it shutters 155 stores in the face of a deteriorating cash position and tighter credit terms from vendors.

    The liquidation sales will go on from Nov. 5 to Dec. 31 and may be extended, Circuit City said, adding that it would close the one remaining store on its own.

    Payments to the liquidation firms and Circuit City would be made from the proceeds of the liquidation sales, the company said. (Reporting by Aarthi Sivaraman; Editing by Gary Hill)

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