Los Angeles - Pressured by the looming recession, and increased competition from the internet, electronics retail giant Circuit City filed for bankruptcy Monday but said it plans to stay in business while it undergoes restructuring. The chainhas 721 stores in the US and 770 in Canada and is the second largest US electronics retailer after BestBuy. In its filing Circuit City listed assets of 3.4 billion dollars and liabilities of 2.32 billion dollars. In total Circuit City said it owes about 650 million dollars to suppliers including 119 million dollars to Hewlett-Packard and 116 million dollars to Samsung.
The bankruptcy announcement came a week after the company said it would close a fifth of its US stores and renegotiate leases on some locations to conserve cash. The closings will leave it with about 566 US stores and slash about 20 per cent of the 43,000-strong workforce. Circuit City also said today it cut 700 jobs in its regional and district store support department.
The company has lost money in five of the last six quarters and said that it had secured 1.1 billion in loans to provide working capital while it restructures.
