News: Circuit City Files For Bankruptcy
Monday, Nov 10, 2008 10:30AM
Mega retailer Circuit City has filed for
bankruptcy protection today (November 10) as a result of a weakened
economy and smaller consumer base.
According to CNN,
the company announced filing for Chapter 11 which will allow
reorganization under strict limitations under the United States'
11 is not a closing or a liquidation," the company wrote in an e-mail
to CNN. "We remain committed to doing a better job of taking care of
our guests, and making it easier to shop at Circuit City."
the company banks on consumers taking advantage of significantly marked
down merchandise like big screen televisions and computers from select
liquidated stores, retail analysts are not as confident.
will be skeptical about buying a $1,000 or $2,000 flatscreen TV with a
warranty at Circuit City," Customer Growth Partners president Craig Johnson told CNN. "In their mind, there's no guarantee that the company will still be around in the future."
concern may exist from outsiders, the choice to file for bankruptcy
protection is one made strategically by the company's president, James Marcum.
decision to restructure the business through Chapter 11 filing should
provide us with the opportunity to strengthen our balance sheet, create
a more efficient expense structure and ultimately position the company
to compete more effectively," Marcum told CNN.
a number of stores likely to begin closing in the coming months, many
Circuit City locations will remain open and are expected to compete at
competitive prices matching Best Buy.
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