Circuit city Stores, the No 2 US consumer electronics retailer, filed for bankruptcy protection on Monday, falling victim to tighter credit terms from vendors and a loss of market share to Best Buy, Wal-Mart Stores and other rivals.The retailer and 17 affiliates filed for Chapter 11 protection from creditors with the US bankruptcy court in Richmond, Virginia.
Circuit City filed a week after saying it would close 155 stores, or more than one-fifth of its retail base, and eliminate 17% of its US workforce. It also said it was considering all options to restructure. The company had lost money in five of the last six quarters.
In recent weeks, suppliers pinched by the global credit crunch have tightened terms, sometimes requiring up-front payments before shipping goods. Best Buy has said it might take over stores that distressed rivals close. According to the filing, Circuit City had $3.4 bn of assets and $2.32 bn of debts as of August 31, and more than 100,000 creditors.Among the company’s largest unsecured creditors are HP, Samsung and Sony, the filing shows. The largest shareholders include HBK Master Fund and First Pacific Advisors.
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