Nov 04 2008
Circuit City Shock Closures - Recession - Credit Crunch - Depression
Circuit City announced today that it is to close 155 stores and eliminate 17 per cent of its employees.
In October, Circuit City stated that they may have to lay off thousands of workers and shut down at least 150 stores to avoid filing for bankruptcy.
The Richmond-based retailer has tried to conserve funds and fend off pressure from vendors as they struggle against the credit crunch. But they have been hit hard.
The company is also seeking emergency funding from ivestment bank Rothschild, but Circuit City are having trouble finding anyone interested in financing them.
Circuit City investors do not want to file for bankruptcy before the holiday shopping season. Their worry is that customers will lose faith in the Companies ability to honor its extended warranties on electrical items.
With products such as TVs and laptops, it is the extended warranty sales that make up a huge part of Circuit City’s overall profits. The company has about 715 stores and outlets in the US and 772 in Canada.
The second-largest US consumer electronics retailer is considering this drastic action as a way to get through the impending holiday season.
With the holiday season looming, things are looking pretty bad for Circuit City at this present moment in time. -
Closing down sales at Circuit City are due to start in selected stores on 5 November.
Christianna Garrett-Martin
That’s terrible that Circuit City has been hit so hard and is having to close that many stores! A real shame for the company and so many jobs to be lost too! Awful.
Excellent article from you as always though, and your up to date news coverage is as ever of an absolutely exceptional standard.