Ultimate Electronics looks to close its 46 stores, including new Tigard location
Published: Monday, February 07, 2011, 8:12 PM Updated: Tuesday, February 08, 2011, 11:55 AM
Ultimate Electronics shorted out.
retailer, bought by Mark Wattles after he sold Hollywood Entertainment,
filed for Chapter 11 bankruptcy less than two weeks ago, saying it
hoped to close under-performing locations, negotiate better leases and
But the retailer apparently has tossed those plans and wants to call it quits.
Monday, U.S. Bankruptcy Court in Delaware approved parent company
Ultimate Acquisitions Partners’ request to speed things up. The court
set a hearing for Friday, where Utimate will seek approval to hire a
liquidator and begin store-closing sales.
Typically, if a retailer decides to liquidate in bankruptcy, the courts don’t get in the way.
recession has been hard on many retailers, yet consumer electronics
chains were hit hard as they faced increasing competition from
discounters such as Wal-Mart.
Best Buy, one of Ultimate’s top competitors, reported its December sales were down 1.6 percent to $8.4 billion. Sales at Best Buy stores open at least a year in the U.S. were down 5 percent.
In its request for the liquidation, Ultimate said it couldn’t secure
additional financing during reorganization and doesn’t have enough cash
to operate the business.
Its pre-bankruptcy lender, General
Electric Capital Corp., which lists Ultimate’s debt as $64.8 million,
wouldn’t provide additional loans during the bankruptcy and or allow
Ultimate to use its cash collateral to buy new inventory, the filing
Ultimate has asked to sign on Hilco Merchant Resources and
Gordon Brothers Retail Partners, the firm that helped clear out
longtime Oregon retailer Joe’s Sports Outdoors & More and the
national electronics chain Circuit City, to liquidate its 46 stores in
Agreements with the two liquidation firms set April 15 as the latest date to close Ultimate’s stores.
is necessary, the filing states, as “any delay in commencing the store
closing sales would diminish the value of the debtors’ assets.”
asked what a consumer who’d purchased a gift card recently should do,
an employee at the Tigard store said, “use it.” The employee said more
information on the liquidation is expected mid-week, but he recommended
that customers should cash in gift cards by Wednesday.
Liquidators were in Denver-area stores on Sunday and one told a local broadcast station, 9News, that the liquidation could start as early as Wednesday.
Called at Ultimate’s headquarters in Thornton, Colo., Wattles did not return a call for comment.
43-year-old retailer opened its first Oregon store in November and
Wattles had gushed of plans to open 14 more nationwide this year. On his
expansion list for the future were at least two more Portland-area
stores as well as locations in Eugene and Salem.
It’s the second
bankruptcy in five years for Ultimate, a once family-owned business
that first filed in 2005. That’s when Wattles bought 32, or around half,
of the chain’s stores. The other stores were closed. He went on to open
10 stores last year, bringing its nationwide presence to 14 states.
In the Jan. 26 filings (Ultimate bankruptcy.pdf) with the U.S. Bankruptcy Court in Wilmington, Del., Ultimate listed assets and debt ranging from $100 million to $500 million.
Capital Management, of which Wattles is president, owns 71 percent of
Ultimate while Hewlett-Packard Co. owns 25 percent.
largest unsecured creditors include Video Products Distributors of
Folsom, Calif., which is owed $6.1 million; Valassis Communications Inc.
of Aurora, Colo., $5.6 million; New Age Electronics/Synnex of
Greenville, S.C., $5.5 million; and Sony Electronics Inc. of San Diego,
— Laura Gunderson: 503-221-8378