Circuit City to stay open in bankruptcy

Circuit City is the No. 2 electronics outlet in the US after Best Buy

Filed for bankruptcy “Chapter 11” on Monday

Hopes to be able to stock shelves in time for holidays

Will close 155 stores

Has 566 operating stores currently

Plans to cut about 17% of it’s 40,000 domestic workers
Is reviewing how best to deal with lack of shoppers in such a bad economy
Will keep rest of stores open through bankruptcy proceedings
“Chapter 11 is no a closing or liquidation. We remain committed to doing a better job of taking care of our guests, and making it easier to shop at Circuit City.” said in an email to CNN
Is seeking approval from bankruptcy court to continue with services such as returns and warranties.
The store will still accept credit cards for purchases
Even though such precautions are being taken, it is thought that the uncertainty of the store’s future will make customers wary of shopping there
Competition by Best Buy and Wal-Mart are thought to be a major threat to the store’s future.
The November-December period can account for 50% of a stores annual profit
Last year, Circuit City decided to fire more than 3,000 of it’s highest paid staff.
The staff was replaced by lower paid workers.
This was thought to be a “strategic blunder” in Circuit City’s behalf
Circuit City has negotiated a commitment for a $1.1 billion credit line to add to it’s curect working capital
This credit line will give Circuit City immediate liquidity while it resorts it’s resources to reorganizing the company and keeping current employees paid.
Circuit City plans to strengthen their balance sheets and restructure their entire company through the support that the Chapter 11 filing offers.