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Circuit City files for bankruptcy protection
Author: Gareth HalfacreePublished: 11th November 2008
The well-known logo might disappear from US streets unless the company can use a $1.1 billion loan to return to profitability.
According to BetaNews, the fifty-nine year old company – which only last week announced a programme of job cuts and store closures that would see its workforce drop by 17 percent and a whopping 155 shops closed for good – has encountered further problems, with concern over cashflow and the company's ability to pay its vendors for stock escalating “considerably.” The credit crunch hasn't helped things, either: with consumer spending down and cashflow looking weak, vendors are demanding cash up front rather than extending the traditional lines of credit for stock the company will need to see it through Christmas.
Current CEO James Marcum issued a statement yesterday stating that he realised that “there is never a good time for individuals to be impacted by decisions like these, and we deeply regret the effect this has on our associates. I want to thank them for their continued loyalty and dedicated effort as we go forward with the belief that implementing long-term and lasting change to our business will come by satisfying our customers, one at a time.”
The announcement of the Chapter 11 filing sent the company's share price tumbling 56 percent, totalling a 99 percent drop from the 52-week high of $8.24 it once enjoyed. Despite this bleak outlook, the company is still hoping to keep afloat: a $1.1 billion loan will ensure that it can keep stores open during the busy holiday period, while the closure of 155 stores described as “underperforming” and loss of 7,300 jobs should help trim the bottom line. Let's hope, for the sake of the company's remaining employees, that it can get through this tough time unscathed.
Do you believe that Circuit City can make it out of Chapter 11, or does the company need a radical rethink to dig itself out of this hole? Share your thoughts over in the forums.
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This was inevitable - last year they reported very poor sales even before the money crunch started.
Best Buy isn't my favorite place to shop for eletronics
circuit city used to have good sales and support ppl. I knew several of them. they knew their ****.
then they got the brilliant idea of firing them all and replacing them with minimum wage morons.
and then they couldn't understand why their sales numbers dropped.
fark them. I hope the management ends up penniless under a bridge.
Same goes for every other business / organization etc in the whole world.
Strange, I got great deals at the closing CompUSAs... Best one was a Logitech G15.
It was marked down to $60, and it was sitting on a half-price rack. On top of that, there was a $30 rebate on the box. It probably was a mistake, but after about a month, the rebate went through.
I paid several cents for a pretty nice keboard.
I might stop by the local Circuit Cities, I need a copy of Vista... They were <$60 at the closing CompUSAs, hopefully similar at the Circuit Cities.
And by the way, Target and Wal-Mart could probably rival Best Buy in their electronics departments within a few years.
Am I too old to learn? The CompUSA close outs were crap. Any hope of CC having any deals?
John
not radio shack! noooooo!
Oh well, cant remember the last time I actually bought something there.
I was going to say the exact same thing
This store always sucked.
It was trying to be a small Best Buy but couldn't
It was trying to be a small Toys' R Us but couldn't
It was trying to be a [Insert real computer store name] but couldn't
It was trying to be a serious electronic store but couldn't
All it had were annoying salesmen (can't be blamed for trying to get commission, but still) and ridiculous prices (9$ for 4 AA batteries that lasted an hour and a half in a CD player)