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Circuit City Stores Inc. (NYSE: CC) is going away for good. The nation's former second-largest consumer electronics retailer told the investing world this morning that it had not been able to reach any kind of deal with creditors or potential bidders of the company. As such, it will ask the bankruptcy judge presiding over its case to begin liquidating all of its assets as soon as possible.

This all started when former Circuit City CEO Phil Schoonover fired over 3,500 sales staffers and tried to replace them with lower-paid workers. The first time you take away your greatest asset -- those who touch customers every day -- due to cost concerns, you're ultimately doomed.

Three bidders are involved in negotiations to acquire Circuit City, but the outright liquidation of the company's assets remains the most likely outcome. The bankruptcy court has set a Friday deadline for the company to reach a deal with a buyer and while an extension is possible, nothing has been agreed to so far.

According (subscription required) to The Wall Street Journal, Golden Gate Capital is the bidder most likely to gain ownership of the company, but Mexican billionaire Ricardo Salinas Pliego is also in the running. His firm owns more than 1,000 electronics stores in Latin America. Hilco Merchant Resources and Gordon Brothers Retail Partners are also pairing up to make an offer.

The company's results have deteriorated even more than was expected since the bankruptcy filing. Putting aside the short-term macroeconomic problems, Circuit is being squeezed by Best Buy (NASDAQ: BBY) on one side and by Wal-Mart (NYSE: WMT) on the other. There's really no reason for the company to go anywhere other than liquidation, and that's what is likely to happen.

It's a cruel blow to the company's 30,000 employees, who are likely to lose jobs because of incompetence at the highest levels of the company.

Circuit City Stores Inc. (OTC: CCTYQ) continues to negotiate with potential buyers who the company says want to continue operating the second-largest electronics retailer. I will believe it when I see it.

The retailer has gotten its butt kicked by Best Buy Co. (NYSE: BBY) for years. Its penny-pinching ways has resulted in lousy service because the company was too cheap to pay experienced sales help. Moreover, this is a bad time to sell electronic gadgets and gizmos that are the very definition of discretionary spending. Retail sales have dropped for six straight months.

Anyone hoping a white knight will rescue Circuit City, which has more than $2.3 billion in liabilities, is going to be surely disappointed. The bankruptcy spooked real estate companies with mall holdings that rent to Circuit City and other chains.

Whatever interest there is in the chain is likely from liquidators and real estate investors. Even these buyers are going to drive a hard bargain because of the distressing number of chains in the same situation such as Linen's 'n Things and KB Toys Inc.

Circuit City Stores, Inc. (NYSE: CC) may start liquidating some if its assets this week, the retailer indicated a few days ago. If Circuit City cannot find someone to help, its existing bankruptcy may turn into a complete obliteration of the entire company.

It's sad for many reasons. First, the incredible mismanagement of the company in the last two years led it down a self-destructive path. Former CEO Phil Schoonover either was very incompetent or very complacent in not attacking the competition, even before the economy collapsed and consumers stopped spending.

Second, it's hard to say if the retailer knew it was headed for oblivion and was only trying to buy time when it filed for bankruptcy last November. It wouldn't be the first time.

Circuit City's situation is so dire that it indicated last Friday that it may promote itself "as a going concern, as separate business units or as individual assets -- including the sale of inventory." In other words, look for a fire sale soon. Unless it receives an equity injection, this company is dead. Dead dead. If January 16 comes and Circuit City does not have some money or a buyer, it'll start breaking itself up faster than the Titanic.

Circuit City Stores Inc. (NYSE:CCTYQ) may not be long for this world.

The troubled electronics retailer said today that it has until the end of next week to reach a deal "with interested parties" or else it would be forced to liquidate. This is hardly surprising.

Circuit City filed for Chapter 11 bankruptcy protection in November after being squeezed by both the credit crunch and rivals including Best Buy Inc. (NYSE: BBY). Moreover, consumer confidence is at an all-time low making it difficult for any seller of discretionary purchases such as electronic gadgets and gizmos.

It will be a miracle if a white knight comes to Circuit City's rescue. For one thing, Best Buy, the No. 1 retailer of electronics, is struggling too. The company today narrowed its 2009 forecast because of weak sales in December Many other retailers are facing hard times and more bankruptcies are expected.

But Circuit City has been in trouble even before the economic slowdown. In March 2007, the second-largest electronics retailer gained headlines after it fired 3,400 "experienced" workers and replaced them with lower-paid less-experienced staff. It was a public relations disaster.

Not only did it make the Virginia retailer to look like a heartless employer, but it made it seem that it did not give a hoot about its customers. People like me have gadget-phobia. Anything computerized or electronic freaks us out. When are looking to buy a new gizmo, we need lots and lots of hand holding from sales people. My fellow gadget-phobes and myself are not going to take a chance of getting poor service from Circuit City.

Like many communities, we have Circuit City and Best Buy next door to one another. Guess which parking lot is usually empty.

In the News:
Dirt Cheap Stocks
Seven extraordinary bargains that should emerge from the recession stronger than ever. They include Hewlett-Packard, Autodesk, Crane, EMCOR Group, KBR and CF Industries Holdings.
http://www.kiplinger.com/magazine/archives/2009/02/dirt-cheap-stocks.html

Best & Worst Managers of 2008
The best leaders have not only ridden out the crisis so far but also gleaned valuable, often profitable, lessons from it. The worst? Well, some helped set the economic crisis in motion; others became paragons of bad judgment in a time of trouble. Among the best are Obama's chief strategiest David Axelrod, Home Depot CEO Frank Blake, JP Morgan Chase CEO Jamie Dimon and Oracle CEO Larry Ellison. Among the worst were Bear Stearns CEO James Cayne, Lehman Brothers CEO Dick Fuld, Circuit City CEO Philip Schoonover and Yahoo CEO Jerry Yang.
http://images.businessweek.com/ss/09/01/0108_best_worst/index.htm?technology+slideshows

Circuit City Stores received final approval for $1.1 billion in debtor-in-possession financing to allow it to continue to pay vendors and employees as it seeks to restructure itself after its bankruptcy filing last month.

Meanwhile, the company's operations have continued to deteriorate even more rapidly than it had forecast when it made the filing.

The company had anticipated same-store sales declines of as much as 35% when it produced its first bankruptcy budget but the company is now saying that sales at stores that aren't closing are down as much as 50% year over year.

Circuit City said in a statement that "With the continued deterioration of the macroeconomic climate, results from other retailers and our operating under Chapter 11 reorganization protection, the fact that our sales are somewhat weaker than our original forecast should not be considered a negative." The company is also looking to void leases on 154 stores it is liquidating after efforts to sell those leases failed to produce enough bids.

The bankruptcy court also let the company void employment and severance contracts with 40 former employees, including the CEO who drove the bus into the ditch: Philip Schoonover.

The company seems to think it can restructure and make a comeback with fewer stores and a better balance sheet. But the fact that better-financed competitors like Best Buy (NYSE: BBY) haven't made a bid for the company indicates that those in the know aren't so optimistic about Circuit City's future.

Circuit City Stores, Inc. (NYSE: CC) has received a new line of $1.1 billion in financing to help it stay afloat as it navigates through Chapter 11 bankruptcy. A court approved the financing, which will replace a $1.3 billion asset-backed loan the company had previously been using.

How Circuit City will emerge from bankruptcy is anyone's guess. When it does, the American economy will still be in the throes of a recession and the name "Circuit City" will still be a black eye on the company from any consumer's perspective. Gregg Galardi, an attorney for the troubled company, indicated that sales at the retailer have plummeted 40% to 50% since the bankruptcy filing, according to The Associated Press.

At a local Circuit City in my area that is closing, the inside looks like a flea market more than any kind of retail operation. There's just a few flat-screen televisions left along with some digital cameras -- and the discounts aren't even that great. Perhaps all the good discounts have already walked out the door tucked under customer's arms. Regardless, the company will keep the new financing to pay employees and utility bills while it reorganizes and continues shuttering under-performing locations over the next few months. That is, until it reorganizes as a "new" entity and the customers still don't show up.

If you made a bet on the specialty retailers leading up to the first $600 taxpayer rebate stimulus package, you got hammered.

Talk about a government plan backfiring big time.

That $300 billion in checks that fell out of the sky from government helicopters back in the March to May timeframe didn't find its way to the malls at all.

Instead, people paid down credit card debt, and tuition, medical and other bills, leaving little for spending on non-essentials.

The result was a litany of store closings nationwide, with several old-line, brand-name retailers going out of business.

It's game over for names like Circuit City (OTC: CCTYQ), Cache (NASDAQ: CACH), Talbots (NYSE: TLB), J. Jill, Wickes Furniture, Levitz, Bombay, Linens 'n Things, Movie Gallery, Wilson Leather, KB Toys and The Sharper Image.

Traders that leveraged into darling names, like hedge fund idol Eddie Lampert's Sears Holdings Corp. (NASDAQ: SHLD), got smoked. Shares of SHLD were trading at $105 when the checks when out. Today the stock is around $40.

Even Costco (NASDAQ: COST) -- the obvious slam dunk, aside from Wal-Mart (NYSE: WMT) -- got slammed, falling from $75 to $45 following the so-called stimulus package.

Best Buy Co. (NYSE: BBY), which had dire predictions for its near-future results just recently, will report quarterly results for its Q3 period this morning at 9:00am CT. Although the consumer electronics retailer is in the boat with almost every other retailer in the process of suffering from a large consumer spending slowdown this holiday season, it's still positioned to be one of the long-term winners competing for shopper dollars.

The reason for this is because it now sits atop the consumer electronics world by itself. Fellow retailer Circuit City's Stores Inc.'s (NYSE: CC) Chapter 11 bankruptcy filing is causing havoc at that competitor, and the five or six times I've scouted local Circuit City stores this month have turned out to be ghost town visits more than anything. Consumers are apparently staying away from Circuit City stores in drives. On the flip side, the many times I've visited Best Buy stores have seen packed houses. Wal-Mart Stores, Inc. (NYSE: WMT) is not the only retailer doing well this holiday season. Just a guess, anyway.

Thomas Bradley of KeyBanc indicated that Best Buy now has a "virtual national monopoly" in the consumer-electronics sector. He's very correct -- who else competes with Best Buy on a national retailer level? One can argue all day long that companies like Wal-Mart and Costco Wholesale Corp. (NASDAQ: COST) are competitors, but neither offers the breadth of consumer electronics, the individual selections nor the specialized services Best Buy does. It does consumer electronics and does them very well -- and now it how no national competitor. Once the economy takes an upswing (and it will), Best Buy will have the market cornered, and that could turn out to give the retailer a very good 2009 indeed.

This post is part of AOL Money & Finance's Best & Worst in Money 2008 feature.

There have been big hopes for all the nominees in this category at one time or another, but they've also suffered from questionable management moves of various sorts. So what's to root for in any of these companies?

Circuit City was founded in 1949; back then it was known as Wards Company. The big-box format and Circuit City name came as the result of a series of retail experiments, and became official in 1984. The company was listed on the New York Stock Exchange in the same year. In 1991, the company established a bank to operate its private-label credit card, and later offered a co-branded Visa. Big-box used car retailer CarMax (NYSE: KMX) was also owned by Circuit City at one point. In 2005, the company's board rejected a buyout offer; the company was worth a reported $1 billion then. The next year, Philip J. Schoonover became chairman, and ... well, the rest is history. Circuit City is now in Chapter 11.

Citigroup (NYSE: C) was formed in 1998 from one of the largest mergers in history: banking giant Citicorp and financial conglomerate Travelers Group. The company holds over 200 million customer accounts in more than 100 countries, and includes the investment services brands Smith Barney and Primerica. The company owns prominent, renowned buildings in Manhattan and Chicago, and also won naming rights to the new ball park of the New York Mets. But it was the subprime mortgage crisis that was Citigroup's undoing, resulting in the need for the recent federal bailout.

Bankruptcies, liquidations, and layoffs are never fun for workers, but it's good to see that someone at Circuit City hasn't lost his or her sense of humor.

With the company deep in slash-and-burn mode, someone decided to slap a "DO NOT SELL" sign on a fire extinguisher.

Welcome to the 87th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.

Wal-Mart Stores Inc. (NYSE: WMT) was set to, as usual, be one of the most aggressive discounters this holiday season in order to move as much inventory as possible. Nowhere is there a better yardstick for just how aggressive one could be than by looking at the deals offered on Black Friday.

As I sat down Thanksgiving Day to a little football and a slew of Black Friday ads to study, it became pretty clear that Wal-Mart was aggressive in its pricing, but by no means the most aggressive. Since it seems consumer electronics continue to be a focus area when it comes to holiday retailing, I focused in on that product segment. So, let's delve deeper and really see who was the most aggressive, shall we?

Although retailer Circuit City Stores, Inc. (OTC: CCTYQ) just a few weeks ago filed motions for Chapter 11 bankruptcy protection, you'd think all was well at the retailer. Not so -- the consumer electronics giant's shares closed yesterday at just over $0.21 and it's a ghost town scenario at many stores. After all, would you shop for holiday goods at a retailer "going out of business" in its current form? That's what Chapter 11 says to many consumers, anyway. Perception is reality.

After having visited a few local Circuit City locations yesterday, they were indeed ghost towns. There was nobody (nada, zilch) in one of the locations I visited, and only one other person in the other location. And get this: comparing several general products in several categories, I saw very few sale prices that could compete with the competition -- namely, Best Buy, Inc. (NYSE: BBY). In categories like computers and MP3 players, Circuit City's pricing was dead in the water. At least its employees were, for the time being, getting paid to stand around doing nothing.

The struggling retailer has a decent wealth of information at its website including an open letter to Circuit City shoppers (PDF File) about the bankruptcy. None of that will cool any heels, though. If Circuit City wants to do any business this holiday season, it has to act like the competition, and that means instant rebates (not mail-in ones) and aggressive price discounts on hot product categories. How about something like "Free MP3 player with purchase!" or something similar? Fly that message on the flagpole and customers will respond. Don't, and you might as well shut the doors until next year.

While you probably won't see many more doors closing before the end of the year, expect to see weak retailers facing liquidations if the holiday season is as bad as many predict it will be. We've already seen 22 retailers file for bankruptcy including Steve & Barry's, Circuit City and Linens 'n Things. Some may survive bankruptcy reorganization and live to see another day. Other retailers may not be able to find the funds to refinance and will be forced to liquidate and close.

Locally, near me in Florida, only one Circuit City has closed and you don't see much evidence of the bankruptcy. Shelves are not stocked as well and advertising is down, but you'd only know that if you watch the stores closely.

The top retailers, such as Wal-Mart (NYSE: WMT) and Best Buy (NYSE: BBY) will survive easily, but many second and third tier retailers will be struggling to make it. Standard & Poors downgraded the credit rating for 53 retailers already this year, which is higher than the total number of downgrades for all of 2007, and it expects to downgrade more before year end. Deloitte Research Chief Economist Carl Steidtmann told Business Week, "It's been a long time since we've seen an environment as challenging as this."