US Retailer Circuit City Stores has filed for Chapter 11 bankruptcy protection one week after it announced that it was closing 155 stores in a bid to save cash.
This decision will also provide the company with the necessary leeway to focus on the crucial pre-christmas period which should be decisive for CC's future and on its own reorganisation.
In an email to CNNMoney, the company said that it was netiher a closing, nor a liquidation although some analysts have already written off chances of Circuit City making a comeback especially as other competitors are having a much better time.
The second biggest electronics retailer in the US has been feeling the economic downturn more profoundly than Best Buy which has invested massively overseas as it is seeking to obtain $ 1.1 billion in debtor-in-possession financing.
The company has $3.4 billion in assets and $2.3 billion in liabilities and has more than 100,000 entities to which it owes money.
It reported a quarterly loss of $240 million, a massive growth compared to last year where it lost $320 million.
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A Circuit City Store At Night
Circuit City's website
Circuit City's shares over the last few hours, the line in red represents Best Buy's shares price
A Circuit City Store, seen from inside