Too bad, never good to see job losses. Now Beast Buy will have more power. The closing stores will start their fire sale tomorrow... Guess I will finally get a camcorder
http://www.reuters.com/article/wtMos...4A235120081103
Circuit City Stores Inc said it would close 155 U.S. stores and was considering all options to restructure in the face of a deteriorating cash position and tighter credit terms from vendors.
The store closures will help to give the No. 2 U.S. consumer electronics chain more time to participate in the holiday shopping season, but analysts said the company could still seek bankruptcy protection in the next few months.
"I think at this point they should be able to get through December," Anthony Chukumba, an analyst with FTN Midwest Securities, said after the closures were announced on Monday.
"We could see additional store closings and/or a Chapter 11 bankruptcy filing after the holidays," he said.
Circuit City, which will operate 566 stores after the closures, has posted losses in five of the last six quarters and shed market share to rivals such as Best Buy Co and Wal-Mart Stores Inc.
In recent weeks, suppliers being pinched by the global financial crisis and credit crunch have tightened terms and in some cases now require up-front payment for inventory before they will make shipments, the company said.
Circuit City said it would cut its U.S. workforce by 17 percent with the store closings, which would result in it exiting markets such as Phoenix and Kansas City, Kansas.
It declined to specify the number of employees affected.
The company had nearly 46,000 employees at the end of February, according to its website.
Circuit City shares, which now trade under $1.00, were up 46 percent in afternoon trading.
Shares of sector leader Best Buy, which has said it could view store closures by rivals as an expansion opportunity, were up about 3 percent.
Circuit City said stores on the closure list would not be open on November 4 ahead of closing sales starting on November 5.
It said it expected the sales to be completed no later than the end of the year.
"This does not preclude (Circuit City) from filing for Chapter 11 later on, or even in a worst-case scenario, completing liquidating the entire chain," Chukumba said.
http://www.reuters.com/article/wtMos...4A235120081103
Circuit City Stores Inc said it would close 155 U.S. stores and was considering all options to restructure in the face of a deteriorating cash position and tighter credit terms from vendors.
The store closures will help to give the No. 2 U.S. consumer electronics chain more time to participate in the holiday shopping season, but analysts said the company could still seek bankruptcy protection in the next few months.
"I think at this point they should be able to get through December," Anthony Chukumba, an analyst with FTN Midwest Securities, said after the closures were announced on Monday.
"We could see additional store closings and/or a Chapter 11 bankruptcy filing after the holidays," he said.
Circuit City, which will operate 566 stores after the closures, has posted losses in five of the last six quarters and shed market share to rivals such as Best Buy Co and Wal-Mart Stores Inc.
In recent weeks, suppliers being pinched by the global financial crisis and credit crunch have tightened terms and in some cases now require up-front payment for inventory before they will make shipments, the company said.
Circuit City said it would cut its U.S. workforce by 17 percent with the store closings, which would result in it exiting markets such as Phoenix and Kansas City, Kansas.
It declined to specify the number of employees affected.
The company had nearly 46,000 employees at the end of February, according to its website.
Circuit City shares, which now trade under $1.00, were up 46 percent in afternoon trading.
Shares of sector leader Best Buy, which has said it could view store closures by rivals as an expansion opportunity, were up about 3 percent.
Circuit City said stores on the closure list would not be open on November 4 ahead of closing sales starting on November 5.
It said it expected the sales to be completed no later than the end of the year.
"This does not preclude (Circuit City) from filing for Chapter 11 later on, or even in a worst-case scenario, completing liquidating the entire chain," Chukumba said.
