Circuit City had only just announced plans to close 155 stores and shed 17% of its US workforce, but it now needs protection from creditors in order to continue its turnaround efforts. Today, Reuters reports: "The retailer and 17 affiliates filed for Chapter 11 protection from creditors with the U.S. bankruptcy court in Richmond, Virginia, where it is based." The story says:
Circuit City had lost money in five of the last six quarters. In recent weeks, suppliers pinched by the global credit crunch have tightened terms, sometimes requiring up-front payments before shipping goods.
The largest unsecured creditors are Hewlett-Packard, Samsung Electronics and Sony. But Circuit City "has arranged a commitment for debtor-in-possession financing of $1.1 billion, which will allow it to continue to operate during the bankruptcy proceeding," says Reuters.
Users might be able to pick up a few bargains, but "a flood of discounted merchandise from liquidating Circuit City stores could hurt Best Buy during this holiday shopping season, said Jefferies & Co analyst Dan Binder."
Philip Schoonover, the former chairman, president, and CEO, resigned in September.
AP has a timeline.
I've bought the odd thing at Circuit City over the years, usually because I've been staying close enough to a store and not had time to hit Frye's. However, I've never found it a particularly welcoming or attractive sort of place. Is it a chain whose time has gone?
