Circuit City Bankruptcy: Electronics Giant Files For Chapter 11 Protection

RICHMOND, Va. -- Circuit City Stores Inc. filed for bankruptcy protection on Monday heading into the busy holiday season as analysts question whether the nation's second-biggest electronics retailer will be able to survive.

The company said it decided to file for bankruptcy protection because it was facing pressure from vendors who threatened to withhold products during the holiday period. The announcement came after many speculated Circuit City was headed for bankruptcy, even after closing 20 percent of its stores, laid off thousands of workers and cut 700 jobs at its headquarters.

Circuit City filed for Chapter 11 protection, which will allow it to hold off creditors and continue operations while it develops a reorganization plan. Its Canadian operations also filed for similar protection.

In court documents, Chief Financial Officer Bruce H. Besanko said three factors led to the bankruptcy filing: erosion of vendor confidence, decreased liquidity and the global economic crisis. Another Circuit City bankruptcy tip-off was the hiring of a restructuring firm a few months back.

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::More on Circuit City bankruptcy, Circuit City bankruptcy predictions and even Circuit City bankruptcy guarantees

Comments

[InofTouch]

02:22 AM on 11/12/2008

I laugh at people...customers arugeing about there service and still unknowing that the employees are laid.

The customer is always right...blah, which this was a producers market

[jurneeka]

08:48 PM on 11/11/2008

My local CC is fairly close to my home/work -that said, it's in a really crummy stripmall that hs seen better days. Last time I ventured in was when I was looking for a digital camera. Customer service was almost nonexistant - as was inventory. Just a bunch of young people milling around , no doubt waiting for their break.

On the other hand, Best Buy (about 5 miles away) has EVERYTHING and terrific customer service. Even without a recession, I doubt that CC would have lasted much longer. From what I've read, it sounds as though the CEOs/upper management just millked the company dry.

[gcallaghan]

07:27 PM on 11/11/2008

They owe me a coupon for a laptop that broke 4 months after buying it., They shipped the laptop to Toshiba. I held off applying for the coupon until the holiday season or until Vista got replaced. There's still 14 months remaining until the warranty period expires. I wonder what my chances are.

[LBA7895]

08:40 AM on 11/11/2008

If you are over 40 years of age, PLEASE DO NOT PATRONIZE CIRCUIT CITY; let them fold! They got rid of all their middle aged store employees two years ago, and replaced them with younger people who would work for far less $$$. How would you like it if YOUR employer did that to YOU? If you do not patronize this company, they will fold by year end, and - as far as I am concerned - they deserve it for the way they treated their older employees.

The nice thing about this economy is that retailers are on life support, and we - the consumer - have life-or-death power over some of them. This is a good time to remember which retailers (like local stores) have treated us well in the past, and send our scarce $$$$ to them, not to some company like Circuit City and Wal Mart that screws its employees, its suppliers and its customers....

[LBA7895]

08:36 AM on 11/11/2008

I would like to remind HuffPo readers that the heartless CEO of this company got rid of all his middle aged employees a couple of years ago, and replaced them with younger employees willing to work for far less $$$$. I wrote the CEO a letter, telling him we would never patronize his company again, and we started a blast e-mail campaign to all our friends over 40, asking them to boycott Circuit City too, for the same reason. While I feel sorry for any employees who lose their jobs because of this, I have no sympathy whatsoever for this heartless company and their craven CEO. But of course, he will get a multi-million-dollar Golden Parachute, won't he? Ahhh, American Business! What a pile of fecal material!

[Sloan48]

01:53 AM on 11/11/2008

I was in need of a spare VGA monitor cable a couple of years ago and I went into my trusty Circuit City. They wanted $35 BEFORE TAX. After regaining consciousness I went online and got it for $6 with shipping. (It was the same brand of cable). I will never shop at Circuit City again.

[realityczech4u]

12:29 AM on 11/11/2008

Time to let this second-rate retailer go under.

[LBA7895]

08:49 AM on 11/11/2008

The sooner, the better, IMNSHO...

[DrDidLittle]

10:57 PM on 11/10/2008

Some very depressed persons designed Circuit City, leading off with the name and the color tones which sort of set a mood and theme. Ever notice when CCs are side-by-side with BestBuys? The Bestbuy parking lots are filled. Poor marketing, poor adverts, poor everything. Well, that's capitalism for you. Sorry, but I'm not sorry.

[TrueIndy08]

10:32 PM on 11/10/2008

alright... so they don't have to pay their creditors... but I will have to continue paying off my credit card with them right????

What a load of BS

[LeonBNJ]

10:26 PM on 11/10/2008

I bought my current TV from them 6 years ago and it went on sale 2 weeks later for $30 less. They made good on their 'best price guarantee', gave me the $30 difference + 10%, or about $33 when I brought the reciept back to the store, so personaly I had a good experience with them.
Over the years they have made many mistakes like the DVIX DVD's, putting in too many locations with too much competition, growth of national and regional competitors (like Best Buy). I have seen recently how their stores seemed to have become more disorganized, weak as to selections, stock and service. Sadly, I say they will go Chapter 7 and go out of business by March 2009, especially if they do poorly during Christmas and the economy stays slow.

[veggiequeenmo]

09:13 PM on 11/10/2008

the circuit city's i've been in have rude salespeople, items not in stock and high prices. i never shop there. and i will never shop a best buy again. their service sucks. both should go down in flames, as far as i'm concerned.

[LBA7895]

08:43 AM on 11/11/2008

Those rude people were hired at cheap wages to replace the middle aged salespeople the company got rid of to save money. I have no sympathy for this company and can't wait for them to shut their doors for good!

[JBS]

08:39 PM on 11/10/2008

Most of the complaints I see against Circuit City apply DOUBLE to Best Buy.

I might buy something from Circuit City, but I'll never even enter a Best Buy again. Their integrity is lacking.

[sklfcats]

08:02 PM on 11/10/2008

GOOD
That is the worst store
Snobby employees and way too loud music
Good Bye

[IntrepidReader]

07:35 PM on 11/10/2008

I became disillusioned with CC years ago when I was shopping around for my first real computer. They would have color fliers loaded down with amazing deals that sounded fantastic until you realized the low price shown in big fonts was after a pile of rebates that you had to apply for, things like a 2 year agreement with AOL and other restrictions that didn't sound so appealing.

My friend Chris turned on them when he and his family got up in the middle of the night to be at the head of the line for Christmas doorbusters. He wanted a DVD player (they were the new thing at the time) and they advertised a dirt cheap price for one between 6 am and 8 am. They found a long line already waiting when they arrived around 5 AM and stood out in the dark cold until the store finally opened, Chris dashed in to request the DVD player and was told they were only available to the first 10 people who entered the store. When he complained, they showed him that the ad said "quantities may be limited". As he said, there's limited and there's false advertising.

[Otaku1031]

07:12 PM on 11/10/2008

CC can burn for all I care. I've had nothing but problems with their employees who are very nice until you tell them you don't want the "Extended Warranty". There's a million horror stories about people trying to get CC to service their EW's and getting nowhere. And their low-price guarantee is a total scam. You have to find an identical item (manuf., part number) in order to get the price matching deal. They don't tell you that the manufacturers assign unique p/n's to CC; you can find an identical item at another store, but the p/n will have an "A" at the end instead of a "B". Different p/n, oops, sorry, no deal.

I feel for the employees, but since most of them are high school mallrats anyway, hey, they're hiring over at Burger King.

[iambusto]

10:18 PM on 11/10/2008

"CC can burn for all I care" thats what most of consumers feel about the big 3 auto anyways...but they are accused of being snobbish :)