Circuit City in its death spiral: may start liquidating this week

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.