January 16, 2009

Circuit City to axe 34,000 more jobs, close 567 remaining US stores

According to AP: “Circuit City became the largest retailer to fall victim to the expanding financial crisis Friday, announcing it will shut down its remaining 567 U.S. stores at the cost of 34,000 more jobs after failing to sell the business.”

“Unfortunately, there won’t be a Circuit City after today,” Circuit City lawyer Gregg Galardi said Friday, January 16, 2009.

“Wall Street analysts said in November that the prospects of long-term survival for the Circuit City were bleak. Months of declining sales during the recession sent the company over the edge, although its problems go back a decade, from buying cheap real estate leases in inferior locations to laying off its most experienced sales staff. The latter saved money but cost the company employee morale and countless customers.”

Update (1-16-2009): Circuit City estimated the value of its inventory at $1.2 billion to $1.3 billion, and creditors are guaranteed 70.5 percent. Stockholders will probably get nothing, Circuit City said in a statement, according to Bloomberg

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