Update 11:30 AM
Circuit City Stores Inc., the nation's second-biggest electronics retailer, filed for bankruptcy protection on Monday but plans to stay open for business as the busy holiday shopping season approaches.
It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a reorganization plan.
The Richmond, Va.-based company has been struggling as nervous consumers spend less and credit has become tighter, and the retail industry overall is facing what's expected to be the weakest holiday season in decades.
Circuit City also said it would cut 700 more jobs, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers.
Update: David Stejkowski makes some very important points about how Circuit City's bankruptcy could affect landlords.
When they announced the store closings, the question you had to ask was: how? Do the leases for the closing stores have termination rights? Landlords aren't just going to walk away smiling. A retailer with the clout of CC usually negotiates a "go dark" provision that allows the store to close but you still have to pay rent.
But under Chapter 11, the retailer can reject the leases it does not want and walk away.
- November 3, 2008, Circuit City Closing 155 Stores
- October 20, 2008, Circuit City Considers Store Closures
- September 30, 2008, Circuit City Hires Restructuring Firm
- July 3, 2008, BW:Is Circuit City Headed for a Blowout?
- July 1, 2008, Blockbuster Drops Circuit City Takeover Bid
- June 25, 2008, Circuit City Plays Coy at Annual Meeting
- May 12, 2008, Weekend Retail Roundup
- April 14, 2008, Retailer Wranglings
- March 11, 2008, Circuit City Continues to Tinker