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