The bankrupt retailer, with no funding to buy more inventory, decides to close nationwide.
Ultimate Electronics Inc., the Colorado-based home electronics retailer that filed for bankruptcy last month, has begun liquidating its 46 locations nationwide, including six in the Twin Cities.
Stores are expected to remain open until stock becomes too thin, and then they will ship remaining merchandise to another location, a Minnetonka employee said. The retailer is attempting to sell its merchandise immediately, so the value of its electronic products does not decrease.
The chain is the latest retail casualty of the recession, which claimed Circuit City, Linens 'N Things, B. Dalton and other national chains. The closings would affect the already high retail vacancy rate of 8.2 percent in the metro area, said Joe Hollman, senior research associate at Cushman & Wakefield of Minnesota.
In Minnesota, besides the Minnetonka store, Ultimate Electronics has stores in Edina, Woodbury, Maple Grove, Burnsville and Roseville. According to the Minnetonka worker, who asked not to be named because workers were told not to talk the media, each store typically employs 17 to 20 people, so closing the six locations in Minnesota could mean a loss of up to 120 jobs.
A Burnsville worker said that location is expected to close within six to nine weeks.
The chain originally planned to keep several locations open, but since filing for bankruptcy Ultimate Electronics found that it lacked the funding to operate its stores and wasn't able to purchase new inventory, court records said.
The company "determined that the highest and best value of the assets" would be achieved in a liquidation sale, according to documents filed with the U.S. Bankruptcy Court in Delaware.
Megan Nicolai is a University of Minnesota student on assignment for the Star Tribune.