retailer

Just a week after saying it was closing some stores to get its finances in order, Circuit City on Monday filed for bankruptcy protection. It will help keep creditors like Sony, Microsoft, Toshiba, and many others who have yet to receive payment for their products, at bay while Circuit City tries to get back on track. The company has also secured a $1.1 billion debtors' line of credit to keep stores open and pay its employees.

The timing, for a retailer, couldn't be worse. It's not exactly assuring that right as we're about to start holiday shopping one of the main places for consumer electronics gifts seems unstable. So what does this mean for consumers? Here are some important questions and answers about what Circuit City's current situation means for you.

Q: Does this mean less choice for places to shop for the holidays? A: Actually, no. Circuit City will be open for business as usual. The company did announce last week that it would be closing 155 stores, which will go on as planned, but 566 of its stores will remain open. Whether they will be fully stocked is another question, but Circuit City says that its new line of credit will help keep its shelves full.

Q: Will there be any staff around to answer my questions? A: Circuit City says it's reduced its support staff in district and regional roles, in addition to the positions eliminated at its stores currently being liquidated. Overall, there will be 20 percent fewer employees company-wide, but the retailer insists its stores will be well-staffed during the holidays. … Read more

Struggling electronics chain Circuit City announced Monday that it has filed for chapter 11 bankruptcy.

Chapter 11 allows a company to hold off creditors while it attempts to restructure its finances. Circuit City said Monday that it has negotiated a commitment for a $1.1 billion debtor-in-possession revolving credit facility to supplement its working capital.

Circuit City announced earlier this month that it would shutter 155 stores and lay off 17 percent of its workforce. The retailer said Monday that it will eliminate an additional 700 positions in addition to the reductions resulting from the store closings, bringing the total … Read more

With the dour economy playing grinch this holiday season, e-commerce retailers may want to focus on offers of free shipping and online coupons, according to a recent survey by comScore.

In a survey of more than 1,000 consumers taken in mid-October, comScore found 73 percent of respondents planned to save money this holiday season by buying fewer gifts and 69 percent by buying less expensive presents, while 37 percent planned to use coupons.

comScore also found that in the third quarter, 25 million Americans visited coupon sites, up 26 percent from the previous quarter. And it's not just … Read more

Apple's retail operation doubled in size during 2008.

Todd Bishop's TechFlash noted a paragraph in Apple's 10-K annual filing released Wednesday that the company now employs 32,000 people on a full-time basis, up from 21,600 at this time last year. Almost 16,000 of those people work in Apple's retail segment, which now has 247 stores.

In last year's annual report, Apple said it had almost 8,000 people working in the retail group, which comprised 197 stores. During fiscal 2008, or the period ended in September, the retail segment accounted for $6.… Read more

When Circuit City announced on Monday that it was closing 155 stores amid financial trouble, it didn't surprise me at all. If you've been following this page over the past year and a half, you know that I've been saying since the beginning that Circuit City doesn't have the chops to stick around and compete with Best Buy.

And although yesterday's announcement was probably a shock to some at the company, it shouldn't have been. For the past few years, Circuit City has been the victim of one of the steepest declines this industry has ever seen.

Right now, the stock is in danger of being delisted from the New York Stock Exchange, thanks to a share price that can't make its way above the $1 mark. In fact, even after announcing the closure of 155 stores, the company's shares rose only 10 cents in daytime trading, bringing its stock price to 36 cents per share.

We can't forget, upon analyzing Circuit City, that this isn't the end of store closures, nor the beginning of financial success. The company is now going to engage landlords in negotiations to "aggressively" reduce rental rates in stores nationwide.

Once that initiative fails--and it will--Circuit City will have no other option but to close even more stores as it tries to find the right balance between size and financial stability.… Read more

While many retailers are understandably nervous about what this holiday will bring, none is likely more so than Circuit City.

Blockbuster rescinded an offer to buy the beleaguered chain earlier this year and its CEO stepped down in September. Its stock has been languishing below $1 for long enough that the company has been notified it could be delisted from the New York Stock Exchange. And now the company has been forced to close 155 stores right before the crucial holiday sales period because of the dearth of credit available in the market right now.

For all intents and purposes, it appears the nation's second-largest electronics retailer is on the verge of disaster. Even if this season's sales results end up not being as bleak as some are predicting, it's unlikely even that could save Circuit City at this point. Circuit City did not respond to a request for comment for this article.

Though Wall Street analysts who watch Circuit City closest aren't ready to go on record to go on a death watch for the electronics chain, suffice it to say, its pulse is getting weaker and things aren't looking good.

The global credit crunch is hurting Circuit City in particular. The retailer buys TVs, stereos, laptops, and other gadgets on credit, usually at a good rate from vendors with the promise to pay it back once the company sells the goods in its stores. But as the company has racked up huge losses, vendors are not giving Circuit City reasonable financing rates. Though Circuit City hasn't come out and said so, some vendors could be convinced altogether that the retailer flat out won't be able to pay the money back and could decline to send Circuit City any products at all. At that point, it becomes almost impossible for Circuit City to operate.

Because of this, the business model of Circuit City and other electronics retailers doesn't work without very fast growth. And sales of many of the big-ticket items like notebooks, flat-panel TVs, and even gaming consoles (it's the first year in awhile there won't be a hot, new, hard-to-get console), are tapering off.

No doubt, the slumping economy is causing some consumers to be more conservative about purchases this year. Consumers polled by the Consumer Electronics Association say they plan to spend $200 less this year than last on holiday items.

Add to that a fundamental shift in the way media is consumed--more online video and digital downloads, slowly moving away from packaged media and accompanying players--and the future of the electronics retail business doesn't look so bright. As prices drop, it gets harder to grow business. And without that growth, it's impossible for Circuit City to pay back those loans, much less suddenly become profitable, said one analyst who asked not to be quoted.… Read more

Circuit City Stores announced Monday it plans to close 155 stores and lay off 17 percent of its workforce in the U.S., as it aims to restructure its business amid a tightening credit market and downturn in business.

Over the past few weeks, the retailer's financial health has become more dire and, according to a report in The Wall Street Journal, was considering restructuring moves as a means to avoid a Chapter 11 reorganization bankruptcy filing.

The struggling electronics retailer noted in its announcement that not only have its sales dropped amid an economic slowdown and loss in … Read more

Things are getting worse at Circuit City.

The embattled electronics retail chain was notified October 24 by the New York Stock Exchange that its stock listing price is so low it's on the verge of being delisted.

According to a form Circuit City filed with the SEC Thursday, the NYSE said the company's stock was "below criteria" because the average closing price was less than $1 per share for the 30 previous days. NYSE requires any company's minimum average over that time period to be $1.

Circuit City's stock closed Friday down 4 cents … Read more

Reflecting consumer pessimism toward the current economic climate, online retailers experienced a decline in visits for the eighth straight week, according to a report released Tuesday.

Traffic to a custom collection of 500 retail Web sites monitored by analyst Hitwise declined 3 percent for the week ending October 25 compared with the same week a year ago.

The declines mirror the overall decline in consumer spending the past couple of months. Visits to Hitwise's Retail 500 Index were up 14 percent from June through August compared with the same period in 2007, but then declined 4 percent in September. … Read more