After closing 155 stores last week, Circuit City has finally bitten the dust. The electronics store chain—with 721 stores in the US and 770 in Canada—has filed for Chapter 11 protection in the U.S. Bankruptcy Court in Richmond, Virginia, pressured by the recession and competition from Best Buy and Wal-Mart. However, it may not be the end for the chain yet.
• January 2008: Increases a credit agreement from $US500 million to $US1.3 billion.
• May 2008: Circuit City tries to sell itself to Blockbuster Inc., after the latter makes an offer that is later withdrawn. At this time, they fire employees with higher salaries and opens smallest stores.
• September 2008: Reports loss of $US239.2 million, after sales fell for the sixth straight quarter.
• November 3: Last week they closed a fifth of their US stores, firing twenty percent of their 43,000-people workforce.
• November 10: Files for Chapter 11 bankruptcy protection. Lists $US3.4 billion in assets and $US2.32 billion in liabilities, owes HP $US119 million and Samsung $US116 million. It lost $US5 billion in stock market value in just two years.
Circuit City has said that their intention is to keep normal operations in their current stores. In theory, under a Chapter 11 reorganisation, companies get a chance to avoid closing, reorganise debt and survive. According to Gary Merson from HD Guru, a local store representative has said that they will even keep honouring and selling gift cards during this period. [Bloomberg -- Thanks Gary]