Projo Biz Blog

Circuit City Stores Inc. filed for bankruptcy protection this morning, just a week after announcing its plans to close one-fifth of stores and lay off 17 percent of its staff.

The Chapter 11 bankruptcy filing allows the nation's second-largest electronics retailer to continue operating while it reorganizes its finances.

After closing 155 stores, the company will have 566 outlets nationwide.

The unprofitable company will not close its lone Rhode Island store, or any of the 20 it operates in Massachusetts. Circuit City has a store in Cranston at the Garden City Center, and in the nearby Massachusetts communities of North Attleboro, North Dartmouth and Seekonk.

The Richmond, Va.-based company said it decided to file for bankruptcy protection because vendors threatened to withhold products during the critical shopping months of November and December.

Circuit City said it secured $1.1 billion in loans to finance its operations while in bankruptcy.

"The decision to restructure the business through a Chapter 11 filing should provide us with the opportunity to strengthen our balance sheet, create a more efficient expense structure and ultimately position the company to compete more effectively," said James A. Marcum, Circuit City's vice chairman and acting president and chief executive officer. "In the meantime, our stores remain fully operational, and our associates are focused on consistent and successful execution this holiday season and beyond.

 Tags  bankruptcy Circuit City

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