8:50 am: Circuit City files for bankruptcy protection
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» See VideoNEW YORK (AP) -- Circuit City Stores, the nation's second-biggest electronics retailer, filed for bankruptcy protection Monday but will stay open for business as the holidays approach.
It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a financial reorganization plan.
The Richmond, Va.-based retailer has been struggling as nervous consumers spend less and credit has become tighter. The announcement came a week after it said it would close 20 percent of its stores and lay off thousands of workers.
The company said it decided to file because it was facing pressure from vendors who threatened to withhold products during the busy holiday shopping season.
Circuit City said it had secured $1.1 billion in loans to provide working capital while it is in bankruptcy.
It had $3.4 billion in assets and $2.32 billion in liabilities, as of Aug. 31.
Circuit City Stores Inc. announced a week ago it planned to close 155 of its more than 700 U.S. stores by Dec. 31. The stores are spread throughout 28 states, including three in Virginia and multiple locations in areas like Phoenix and Atlanta. It is laying off about 17 percent of its domestic work force, which could affect up to 7,300 people.
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pahootaman
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11-10-08 3:49 PM
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there's a good chart in consumerist dot com that tracks the history of CC demise. It all started March of 2007 when they fired about 10% of their staff to hire untrained/ unskilled min wage employees. Basically, if you knew what 1080p was or how t burn a cd, you were fired.
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autoworker
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11-10-08 11:49 AM
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wonder how much they set aside for the ceo's and friends up front.
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pahootaman
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11-10-08 10:05 AM
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don't worry, they'll still be around to not honor your $400 laptop warrenty, get general information wrong, and still totally ignore you when you're ready to purchase.
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