Circuit City spokesman Bill Cimino says the company has adequate liquidity to survive several quarters, if not years. "To my knowledge, a Chapter 11 filing is not part of the strategic alternatives that we are looking at," he says.
The company says it is making progress toward returning to profitability in the second half of the year, through better sales of accessories and warranties and customer service improvements such as training sales reps to greet customers, ask the right questions, and make recommendations.
Some analysts and investors are doubtful, however. "Sure, the company has cash, but the question is can they return to profitability in this environment? The market is saying no," says Andy Hargreaves, an analyst at investment bank Pacific Crest Securities in Portland, Ore.