Posted on 11/10/2008 6:13:04 AM PST by marshmallow
NEW YORK (CNNMoney.com) -- Circuit City Stores Inc., the No. 2 electronics seller after Best Buy, filed for bankruptcy protection Monday, thus becoming the latest retailer hurt by a worsening economic downturn.
According to the company's Chapter 11 filing with the U.S. bankruptcy court in Richmond, Va., Circuit City (CC, Fortune 500), which currently has 566 operating stores in the United States, will continue to do business and pay its workers while it restructures debt and its business operations.
Circuit City said it decided to file for bankruptcy at this time to ensure that it would have "adequate merchandise flow to stores during the important holiday season."
The November-December holiday shopping months are crucial to retailers since the two months can account for 50% or more of merchants' annual profits and sales.
Just last week the Richmond-based company announced that it would close another 150 stores and cut about 17% of its domestic workforce as it continues to face eroding sales at its stores.
The company said it has negotiated a commitment for a $1.1 billion "debtor-in-possession" (DIP) revolving credit facility to supplement its working capital. The company said the DIP credit will replace the company's $1.3 billion asset-based credit facility provided by its lenders.
The retailer said the credit facility will give it immediate liquidity while it works to reorganize the business and enable it to pay its vendors and its roughly more than 40,000 employees.
"We recently have taken intensive measures to overcome our deteriorating liquidity position," James Marcum, Circuit City's acting president and chief executive officer, said in a statement.
(Excerpt) Read more at money.cnn.com ...
much deserved.
best buy and circuit city sux.
si.
Best Buy is still viable more or less. Ebay and MicroCenter would be my guess as to who or what killed CC.
This has been a long time coming for CC. The present economy didn’t have much to do with it.
They thought they could fix things. I guess that changed Tuesday last.
Anybody know the odds if they are gonna ask US Sam for money? Lol. Serious.
Agreed. This has been talked about for a couple of years.
Maybe they can get out the “free gubmint bailout money” list.
Empty Big Box real estate available cheap. CC had very stiff competition in Best Buy everywhere they had a location.
If ever a company could be said to be poorly run it would be CC. WSJ did several stories about how upper management came to believe its top producers were over paid, so they fired them. Genius !
Amazon as well. I don’t think Microcenter is big enough - more like Fry’s Electronics.
Their recent boneheaded decisions at corporate didn’t help either.
So, Circuit City - how did that decision to can all of your experienced salespeople work out?
Tech ping!
You got that right.
My Son-in-law was in their management program for about 6 months and walked out the door saying they would be bankrupt by the time he got his own store, so why bother.
both stores have these arrogant and ignorant
sales people.
i stopped buying from both.
No argument about that, but you have to blame management as well. Several years ago, CC revamped its product line. Large items such as washers, dryers and refridgerators were dropped from the product line and replaced with music and additional electronic gadgets.
CC put the gun in its own mouth and pulled the trigger when they drove off a LOT of career floor salespeople who worked for commission and replaced them with hourly-only kids. They thought cutting back on their personnel costs would save on the bottom line. Instead, their sales plummeted, their service tanked, and customers went elsewhere. Generally, they went to BB because at least BB takes good care of their stores, and CC had more than its share of old, rundown shacks it tried to pass off as stores.
I worked there for six years. It was a good job, but I can honestly say, “Good riddance.”
look at druge’s $ 2 trillion story up now.
Great store. I drive past several BBs and CCs on my way there.
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