Circuit City not dead yet

Systemax, the company behind CompUSA and Tiger Direct, is hoping acquire the Circuit City brand and keep it alive online. The company this week disclosed that is has signed what is known as a “stalking horse” agreement to purchase select assets of Circuit City’s e-commerce business for $6.5 million in addition to an undisclosed share of future revenue generated from the utilization of those assets during the next two and a half years. According to the company, the deal would put it in a position to extend its leadership in online sales of value-priced, branded consumer electronics.

The offer has to clear several hurdles including approval by the Bankruptcy Court for the Eastern District of Virginia, Richmond Division. There is also the issue of an auction process and a Systemax statement notes that the deal will not be completed if a higher or better bid for the assets is submitted and approved by the court. If the deal goes through, Systemax could see its revenues increase considerably from last year’s $812 million. Of course, work needs to be done to restore consumer confidence in the Circuit City name.