Ultimate Electronics files for bankruptcy

After opening its doors more than 40 years ago, consumer electronics retailer Ultimate Electronics Inc. is going out of business. The national retailer began liquidating sales Saturday after filing for Chapter 11 bankruptcy on Jan. 26.

It is the second time in five years that the Colorado-based business has filed. The last time was in 2005 when owner Mark Wattles, founder of Hollywood Video, took over the company.

Before deciding to close all 46 of the company’s locations, including the one in Wisconsin, Wattles said in a statement he initially intended to only close under-performing locations, negotiate better leases and increase profit.

However, the company could not secure necessary funds from several creditors, to whom it owes $100 million to $500 million, according to the bankruptcy filing.

Now, all products must go.

In the 16 states with Ultimate locations, each store has advertised sales on electronics and home appliances of up to 30 percent off.

Bruce Giesbrecht, Ultimate Electronics CEO, encouraged consumers to buy products soon before they lose value. He agreed with liquidation firms to set April 15 as the latest date to close stores, according to the statement.

The sale is being jointly run by two national liquidation specialists, Hilco Merchant Resources and Gordon Brothers group, the same firms that helped Circuit City, another electronics retailer, close its doors in 2009.

Coincidentally, the Ultimate location in Greenfield at 4585 S. 76th St., Ultimate’s only Wisconsin store, is the former home of Circuit City. The Greenfield store opened less than six months ago.

While Circuit City now solely works through online business, Ultimate’s website is no longer in operation and simply informs viewers of the sale and where to find the nearest location.

Perhaps the ultimate failure of these two former tech-giants can be attributed to yet another electronics retailer: Best Buy, which competes for business just across the street at 4610 S. 76th St.

Though Best Buy is one of the few electronic retailers to stay afloat during the recession, the business’ sales were down 1.6 percent to $8.4 billion in December, its website said.

Noreen Lephardt, adjunct associate professor in the College of Business Administration, cited a nine percent unemployment rate and decreased consumer incomes as reasons for poor business.

She also said it is no surprise that stores catering to non-essentials — anything aside from food, shelter or clothing — would suffer during a slow recovery.

“When people are making choices about what they can afford to purchase, it is generally an iPod, new phone or other non-necessity that will not be purchased,” Lephardt said in an e-mail.

These non-necessities are just the type of products Ultimate Electronics is trying to clear from shelves. The Greenfield location is marking video games and cameras at 10 percent off, DVDs at 20 percent off, and several plasma TVs at 10 percent off.

Though products are certainly not flying off shelves as stores enter their second week of liquidation, several products labeled “last one” are competing for consumer attention.

One Greenfield couple entering the store Wednesday came in search of Nintendo DS games and possibly a DVD player. The couple knew little about the closing.

“We bought a TV here about a month ago,” the man said. “We just saw the big sale signs and decided to come.”