Virgil
11-10-2008, 12:29 PM
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAQ.kD7R4boc&refer=home
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By Mark Clothier and Dawn McCarty
Enlarge Image/Details
Nov. 10 (Bloomberg) -- Circuit City Stores Inc., the 59-year- old seller of televisions and computers, filed for bankruptcy protection, becoming the biggest retail casualty of the slowing U.S. economy and frozen credit markets.
The chain sought Chapter 11 protection in U.S. Bankruptcy Court in Richmond, Virginia, today after suppliers concerned about declining sales at almost 1,500 U.S. and Canadian stores cut off credit and demanded up-front cash for shipments. The company owes $119 million to Hewlett-Packard Co., the world's largest maker of personal computers, and $116 million to Samsung Electronics Co., the top maker of flat-panel displays, according to a filing.
Circuit City, the biggest electronics retailer in the U.S. until the mid-1990s, filed for bankruptcy before it had a chance to take in cash from the holiday selling season, when it gets more sales than any other time of the year. The chain is losing market share to Best Buy Co. and Wal-Mart Stores Inc. while Amazon.com Inc. and other online retailers undercut it with lower prices.
``It's very incongruent for retailers to file bankruptcy before Christmas,'' Burt Flickinger, managing director of consultant Strategic Resource Group in New York, said in a Bloomberg Television interview.
The Richmond-based company, founded in 1949 when Samuel Wurtzel opened the city's first retail television store, has lost more than $5 billion in stock-market value in two years. It plans to stay in business while restructuring.
Trouble Paying
Vendor concern that Circuit City wouldn't be able to pay its bills ``escalated considerably'' in the past week, the company said in its filing. It also filed for bankruptcy in Canada.
Circuit City fell 14 cents to 11 cents at 9:30 a.m. before the start of trading on the New York Stock Exchange. The NYSE halted buying and selling of the shares after the stock's early plunge.
On Nov. 3, the retailer said it would close a fifth of its U.S. stores and renegotiate leases on some locations to conserve cash. The closings will leave it with about 566 U.S. stores and trim about 20 percent of the 43,000-strong workforce. Circuit City also said today it will cut 700 jobs in its store-support department.
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By Mark Clothier and Dawn McCarty
Enlarge Image/Details
Nov. 10 (Bloomberg) -- Circuit City Stores Inc., the 59-year- old seller of televisions and computers, filed for bankruptcy protection, becoming the biggest retail casualty of the slowing U.S. economy and frozen credit markets.
The chain sought Chapter 11 protection in U.S. Bankruptcy Court in Richmond, Virginia, today after suppliers concerned about declining sales at almost 1,500 U.S. and Canadian stores cut off credit and demanded up-front cash for shipments. The company owes $119 million to Hewlett-Packard Co., the world's largest maker of personal computers, and $116 million to Samsung Electronics Co., the top maker of flat-panel displays, according to a filing.
Circuit City, the biggest electronics retailer in the U.S. until the mid-1990s, filed for bankruptcy before it had a chance to take in cash from the holiday selling season, when it gets more sales than any other time of the year. The chain is losing market share to Best Buy Co. and Wal-Mart Stores Inc. while Amazon.com Inc. and other online retailers undercut it with lower prices.
``It's very incongruent for retailers to file bankruptcy before Christmas,'' Burt Flickinger, managing director of consultant Strategic Resource Group in New York, said in a Bloomberg Television interview.
The Richmond-based company, founded in 1949 when Samuel Wurtzel opened the city's first retail television store, has lost more than $5 billion in stock-market value in two years. It plans to stay in business while restructuring.
Trouble Paying
Vendor concern that Circuit City wouldn't be able to pay its bills ``escalated considerably'' in the past week, the company said in its filing. It also filed for bankruptcy in Canada.
Circuit City fell 14 cents to 11 cents at 9:30 a.m. before the start of trading on the New York Stock Exchange. The NYSE halted buying and selling of the shares after the stock's early plunge.
On Nov. 3, the retailer said it would close a fifth of its U.S. stores and renegotiate leases on some locations to conserve cash. The closings will leave it with about 566 U.S. stores and trim about 20 percent of the 43,000-strong workforce. Circuit City also said today it will cut 700 jobs in its store-support department.
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