It has been some tough sledding in November for big box retailer Circuit City.
Just last week the company announced that it was closing 155 stores in a move that would put 17% of its workforce out of job by the end of the year.
Meanwhile less than a week later, the company was back in the news again for all the wrong reasons. Today they took it to the next and final step as they filed for bankruptcy.
The reason?
Increasingly nervous creditors had decided to cut them off at the knees going into the holiday season. That proved to be too much for the 59-year-old company, even though it was working feverishly to keep the boat afloat.
In all, according to the filing some $650 million is owed by the company to a host of big brand vendors. They include:
Hewlett-Packard US Operations…………….. $118,797,964
Samsung Electronics Amer Inc………………..$115,925,716
Sony Computer Entertainment………………..$60,009,803
Zenith Electronics Corp. ……………………..$41,162,162
Toshiba America Business Solutions Inc…….$17,919,395
Alliance Entertainment ……………………….$15,799,754
Garmin International Inc……………………….$15,444,498
Olympus Corporation………………………….$15,095,651
Nikon Inc………………………………………$14,926,445
Paramount Home Video ………………………$13,761,444
Panasonic Company National Acct…………..$13,283,022
Mitsubishi Digital Electronics………………..$12,883,892
Eastman Kodak Co…………………………. $11,510,410
Lenovo, Inc. …………………………………$10,920,887
Warner Home Video…………………………..$10,738,637
IBM……………………………………………$9,354,353
OnCorp US, Inc………………………………$8,470,923
Microsoft Corp Consignment…………………$8,088,245
Sharp Electronics Corp……………………….$7,054,093
Vizio………………………………………….$6,951,769
Here’s the rest of the skinny on the filing from Bloomberg.
It is in an article by Mark Clothier and Dawn McCarty entitled: Circuit City, Electronics Retailer, Seeks Bankruptcy
“Circuit City Stores Inc., the 59-year- old seller of televisions and computers, filed for bankruptcy protection, becoming the biggest retail casualty of the slowing U.S. economy and frozen credit markets.
The chain sought Chapter 11 protection in U.S. Bankruptcy Court in Richmond, Virginia, today after suppliers concerned about declining sales at almost 1,500 U.S. and Canadian stores cut off credit and demanded up-front cash for shipments. The company owes $119 million to Hewlett-Packard Co., the world’s largest maker of personal computers, and $116 million to Samsung Electronics Co., the top maker of flat-panel displays, according to a filing.
Circuit City, the biggest electronics retailer in the U.S. until the mid-1990s, filed for bankruptcy before it had a chance to take in cash from the holiday selling season, when it gets more sales than any other time of the year. The chain is losing market share to Best Buy Co. and Wal-Mart Stores Inc. while Amazon.com Inc. and other online retailers undercut it with lower prices.
“It’s very incongruent for retailers to file bankruptcy before Christmas,” Burt Flickinger, managing director of consultant Strategic Resource Group in New York, said in a Bloomberg Television interview.
Vendor concern that Circuit City wouldn’t be able to pay its bills “escalated considerably” in the past week, the company said in its filing. It also filed for bankruptcy in Canada.”
Another one bites the dust.
