10 Nov 2008, 1841 hrs IST, REUTERS
NEW YORK: Circuit City Stores Inc, 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 Co, Wal-Mart Stores Inc and other rivals.
The retailer and 17 affiliates filed for Chapter 11
protection from creditors with the US bankruptcy court in Richmond, Virginia, where it is based.
Circuit City filed a week after saying it would close 155 stores, or more than one-fifth of its retail base, and eliminate 17 per cent 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.
Larger rival Best Buy, which is based in Minneapolis, has said it might take over stores that distressed rivals close.
According to the filing, Circuit City had $3.4 billion of assets and $2.32 billion of debts as of Aug 31, and more than 100,000 creditors.
Among the company's largest unsecured creditors are Hewlett-Packard Co, Samsung Electronics Co and Sony Corp, the filing shows. The largest shareholders include HBK Master Fund LP and First Pacific Advisors LLC, the filing shows.
Shares of Circuit City last traded Friday at 25 cents, New York Stock Exchange data show. They fell to 13 cents in pre-market trading.
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