Circuit City Falls Victim to Recession, Begins Liquidation

January 16, 2009 12:25 PM ET

Circuit City has become the latest victim of the economic downturn wreaking havoc on the electronics and music industries. The company issued a press release today announcing it will seek the approval of the Bankruptcy Court to begin liquidating all its assets.

"We are extremely disappointed by this outcome. The company had been in continuous negotiations regarding a going concern transaction," Circuit City vice chairman James Marcum said. "Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company."

Circuit City filed for Chapter 11 bankruptcy protection in November 2008, closing 155 stores before the end of '08 while it sought a buyout; an attempt to merge with Blockbuster fell through in July. With the retail giant closing its doors, music fans are left with one less place to buy CDs, as well as stereos and the other audiophile gadgets — just last week, thousands of newly developed electronics debuted at Las Vegas' Consumer Electronics Show (CES) (click here for our rundown on the best).

As Rolling Stone has reported, the flagship Times Square Virgin Megastore is closing, and Best Buy is devoting less floor space to CDs. Yesterday industry blog Coolfer pointed out a blog post by echo's Mark Montgomery, who attended Billboard's Digital Music Conference and heard that "the CD might have two more years in Walmart." Walmart is currently the nation's second-largest music vendor, behind iTunes. As of now, the outlook for physical album sales is certainly bleak.

Related Stories:

Tech '09: The Hottest Rock Gadgets on the Horizon
The Great Rock & Roll Gift Guide
Why Black Ice Beat Chinese Democracy: The Tale of Walmart Vs. Best Buy
CD Sales' Coldest Winter: December Numbers Plummeting

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Song Stories

“Whoomp! (There It Is)”

Tag Team | 1993

Cecil Glenn — a.k.a., "D.C." — was a cook at Magic City, a nude dance club in Atlanta, when he first heard women shout "Whoomp — there it is!" Inspired by the party chant, he and partner Steve "Roll'n" Gibson wrote a song around it. Undaunted by label rejections, they borrowed $2,500 from Glenn's parents and pressed 800 singles, which quickly sold out in the Atlanta area. A record deal came soon after. Glenn said the song was meant for positive partying. "If you're going to say 'Whoomp there it is,' and you're doing something negative, we'd rather it not have come out of your mouth."

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