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150 PART 2 • STRATEGY FORMULATION

KB Toys Inc. recently said it would liquidate its 400 mall-based and outlet stores.
Hundreds of retailers have liquidated, including Linens ’n Things and Mervyn’s. One of the
largest retailers of Western wear in the United States is BTWW Retail L.P., and that company
too is liquidating its 95 stores. Perhaps the most well-known American retailers that liquidated
in 2009 was 60-year-old appliance and electronics chain, Circuit City, which closed all of its
remaining 567 stores and laid off all of its remaining 34,000 employees. Nearly every major
U.S. retailer that has sought to reorganize under bankruptcy-court protection in the last two
years has eventually liquidated due to lack of buyers or financing. Circuit City’s disappearance
is expected to benefit Best Buy and the world’s largest retailer, Wal-Mart Stores. Just prior to
Circuit City’s liquidation, the firm owed more than $1 billion to more than 100,000 creditors,
including owing $118.8 million to Hewlett-Packard and $115.9 million to Samsung.
Perhaps the most well-known European firm that liquidated in 2009 was Waterford
Wedgwood PLC in Ireland. This maker of Waterford Crystal as well as the Wedgwood and
Royal Doulton china patterns was founded in 1759 and had 7,700 employees in the United
Kingdom, Ireland, Indonesia, and elsewhere. This company was heavily laden with debt,
and when consumer spending on expensive dinnerware declined drastically in 2008, the
firm was brought to its knees.
The Lynchburg, Virginia–based Peanut Corporation of American filed for Chapter 7
liquidation in early 2009 after the national salmonella outbreak attributed to the firm
crippled the business. The salmonella outbreak had been traced to the company’s plant in
Blakely, Georgia. Companies that file Chapter 7 sell their assets and distribute the pro-
ceeds to creditors.
Several retailers that officially completed their Chapter 7 liquidations in 2009
were Goody’s, Whitehall Jewelers, and Circuit City. Table 5-7 describes firms that recently
liquidated.
Thousands of small businesses in the United States liquidate annually without ever
making the news. It is tough to start and successfully operate a small business. In China
and Russia, thousands of government-owned businesses liquidate annually as those coun-
tries try to privatize and consolidate industries.

TABLE 5-7 Companies That Recently Liquidated, Declaring Chapter 7 Bankruptcy
Aloha Airlines—After more than 60 years of service to and within Hawaii, the firm made its last passenger flight on March 31,
2008. The company liquidated after bankruptcy protection did not work for it.
Sharper Image Corporation—The company recently liquidated, citing declining sales, three straight years of losses, and litigation
involving its Ionic Breeze air purifiers.
DayJet Corporation—The Boca Raton, Florida–based small startup airline, which intended to shuttle busy business travelers between
regional airports, recently grounded its planes and liquidated.
Tweeter—The home electronics retailer filed for Chapter 7 liquidation and is selling all merchandise in all its stores.
IMetromedia Restaurant Group—The parent company of Bennigan’s and Steak & Ale restaurant chains, the firm recently filed for
Chapter 7 bankruptcy protection and closed all 150 of its company-owned stores.
IndyMac Bank—The Office of Thrift Supervision shut down this bank recently after it succumbed to the pressures of tighter credit,
tumbling home prices, and rising foreclosures. Control of its assets was transferred to the Federal Deposit Insurance Corp. as
IndyMac filed for bankruptcy protection.
Skybus Airlines—This discount airline known for $10 fares and à la carte extras abruptly liquidated recently. The airline had made 74
daily flights to 15 U.S. cities. The shutdown affected about 350 employees in Columbus, Ohio, and 100 in Greensboro, North Carolina.
Whitehall Jewelers—Founded in 1895, the Chicago-based jeweler had about 375 retail locations in 39 states. Following a bankruptcy
filing in June 2008, the firm recently closed all its locations.
Amabassadair—The Indianapolis-based airline was founded in 1973, but the unexpected loss of a major contract for its military
charter business forced the airline into bankruptcy and then the firm ceased operations.
Domain Home Furniture—The 27-store Norwood, Massachusetts–based chain was founded in 1985. For two decades, Domain
Home was a mainstay of the Northeast’s high-end furniture market known for quality furniture and other home decor products.
The company recently declared bankruptcy and closed all stores.