The holiday shopping season is just getting underway in what is shaping up to be a low spending year. One retailer is struggling to keep afloat after slashing nearly 10,000 jobs last week and closing a quarter of its stores. Now it finds itself laying off 700 white collar workers at its corporate headquarters and filing for bankruptcy protection.
Circuit City, which is America’s second largest electronics retailer behind Best Buy, filed for Chapter 11 bankruptcy. This will allow the company to hold off creditors while it restructures. Circuit City’s biggest creditors are its vendors: Hewlett-Packard has a $118.8 million claim, Samsung ($115.9 million), Sony ($60 million), Zenith ($41.2 million) and Toshiba ($17.9 million).
Chief Financial Officer Bruce H. Besanko explained the company’s position in court documents. “Without immediate relief, the company is concerned that it will not receive goods for Black Friday and the upcoming holiday season, which could cause irreparable harm to the company and its stakeholders,” Besanko said in the filing. Interested consumers can find discounted products at the stores that are closing.
