Monday, October 20, 2008

Rumor: Circuit City Possibly Closing 150 Stores, Massive Job Cuts

Rumors has it Circuit City is considering closing at least 150 locations and slashing thousands of jobs to avoid filing for Chapter 11 bankruptcy protection.

The Wall Street Journal is citing sources close to the company that say drastic measures may be taken to put the electronics retailer back on course. Circuit City is reportedly considering closing 150 stores and cutting thousands of employees. The move would allow Circuit City to liquidate $350M USD in assets and possibly avoid Chapter 11 bankruptcy.

Circuit City is currently the nations second largest electronics retailer behind Best Buy. However so far this year, shares have lost 90.7 percent of their value. With the looming financial crisis one can only guess that they'll be hit even more in the months to come.

Earlier this year Blockbuster made a takeover bid for just over a billion dollars. That bid was later withdrawn, with Blockbuster citing market changes.

One thing is for sure, with the recent closing of CompUSA should Circuit City close it doors Best Buy will be sitting even higher atop the food chain. They'd almost have a monopoly as one of the only remaining nationwide brick-and-mortar electronics stores. Personally I never shop either place. Stores like Fry's and Newegg file my needs at a cheaper price.

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