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Circuit City Files for Bankruptcy
America’s third largest electronics retailer with 721 stores in the U.S. and 770 in Canada, has petitioned for Chapter 11 protection in U.S. Bankruptcy Court in Richmond. After losing money in five of the last six quarters and announcing last week it would close 155 stores, Circuit City is seeking bankruptcy protection amidst fears that it would not be able to pay its vendors. The company presently owes Hewlett-Packard Co.$119 Million and Samsung Electronics Co. $116 million.
A deal earlier this year that involved Blockbuster Inc. buying the retailer fell through when a preliminary offer was withdrawn.
"On Sept. 29, Circuit City reported a loss of $239.2 million that was more than triple from a year earlier after sales fell for the sixth straight quarter.
Losing Share ~
Circuit City's rivals gained market share by offering Apple Inc. and Dell Inc. computers. Larger Best Buy and discount retailer Wal-Mart lowered prices on flat-panel televisions to lure U.S. customers, who are limiting spending because of higher food costs, further job losses and declining home values.
The global financial crisis is making it harder for the chain to stock its shelves and for consumers to finance purchases.
The company took on more debt this year, increasing a $500 million revolving credit agreement to $1.3 billion in January, according to its most recent quarterly filing with the U.S. Securities and Exchange Commission. As of May 31, Circuit City said it still had $963 million available to borrow."
Losing Share ~
Circuit City's rivals gained market share by offering Apple Inc. and Dell Inc. computers. Larger Best Buy and discount retailer Wal-Mart lowered prices on flat-panel televisions to lure U.S. customers, who are limiting spending because of higher food costs, further job losses and declining home values.
The global financial crisis is making it harder for the chain to stock its shelves and for consumers to finance purchases.
The company took on more debt this year, increasing a $500 million revolving credit agreement to $1.3 billion in January, according to its most recent quarterly filing with the U.S. Securities and Exchange Commission. As of May 31, Circuit City said it still had $963 million available to borrow."
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Via: Bloomberg | News Archive
Comments
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Time to go to close out sales. I really hate this I hope they survive some how. Dont want Best Buy to be the only kid on the block. Even more so all the people that will loose there jobs its just sad! I hope they can survive this! |
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Wow this is just sad. No wonder they were in a hurry to close out those stores. My thoughs are with you Ice. What really pisses me off about this is the blockbuster buy out. CC and yahoo both could have been bought out and be just fine. Think of your stockholders and your employees. The High ups will still leave multi millionaires. |
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http://consumerist.com/5082090/timeline-how-circuit-city-came-undone
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Interesting link, Bob! |
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Copyright © 1999 - 2009 David Altavilla and HotHardware.com, LLC. All rights reserved. Privacy and Terms