The electronics retailer Circuit City Inc. are closing the hundreds of stores they own and selling all of its merchandise. We know that the unemployment rate has increased and this is one of the reasons why. Thousands of employees in the United States are being laid off and one of the reasons is because firms like Circuit City Inc. are bankrupt.
The judge approved Circuit City's file for bankruptcy on January 9, 2009 with the U.S. Bankruptcy Court for the Eastern District of Virginia. The firm claims that this was their final option because their creditors and lenders would not agree to give Circuit City time for payments. Circuit City Inc. has started their liquidation process and the retailer’s Web site and call center are no longer in operation.
There are many things that contributed to Circuit City Inc. filing for bankruptcy. Two external factors are the recession and the credit market freeze. An internal factor is the firm’s poor management skills. There was not much that differentiated Circuit City Inc. from other electronic retailers. However the story of Circuit City’s Inc. is not over because there has been word of bidders wanting to purchase this merchant and restructure it.
Sources:
1. http://money.cnn.com/2009/01/16/news/companies/circuit_city/
2. http://www.nytimes.com/2008/11/11/technology/11circuit.html
3. http://www.istockanalyst.com/article/viewiStockNews/articleid/2784047
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