Two pieces of bad news, about 30 minutes ago:
Circuit City files for bankruptcy protection
By VINNEE TONG, AP Business Writer Vinnee Tong, Ap Business Writer – 18 mins ago
NEW YORK – Circuit City Stores, the nation's second-biggest electronics retailer, filed for bankruptcy protection Monday but will stay open for business as the holidays approach.
It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a financial reorganization plan.
The Richmond, Va.-based retailer has been struggling as nervous consumers spend less and credit has become tighter. The announcement came a week after it said it would close 20 percent of its stores and lay off thousands of workers.
The company said it decided to file because it was facing pressure from vendors who threatened to withhold products during the busy holiday shopping season.
update (hat tip to graccus) below:
Just last week they announce a cut in stores and payroll, but it did not take much for the Holiday Season reality to arise.
Circuit City said it had secured $1.1 billion in loans to provide working capital while it is in bankruptcy.
It had $3.4 billion in assets and $2.32 billion in liabilities, as of Aug. 31.
Circuit City Stores Inc. announced a week ago it planned to close 155 of its more than 700 U.S. stores by Dec. 31. The stores are spread throughout 28 states, including multiple locations in areas like Phoenix and Atlanta. It is laying off about 17 percent of its domestic work force, which could affect up to 7,300 people.
Also, to open the new week, DHL made a stunning announcement
DHL to cut 9,500 jobs and close US service centers
FRANKFURT, Germany – Deutsche Post AG will close all of its DHL Express service centers, cut 9,500 jobs in the United States and eliminate U.S.-only domestic shipping by land and air, the company said Monday, citing heavy losses and fierce competition.
The Bonn-based company said that new round of cuts are on top of another 5,400 job cuts it already announced and blamed heavy losses at the unit, which competes with rivals UPS Inc. and FedEx Corp.
graccus adds:
Circuit City tried to sell itself in May after Blockbuster Inc. made a preliminary offer that was later withdrawn. The retailer fired higher-paid workers and opened smaller stores to cut costs. Until the shift, the company's strategy had been to sell in locations as large as 44,000 square feet (4,090 square meters), which it calls ``superstores.''
From the Bloomberg story on the bankruptcy.
his Bloomberg link:
http://www.bloomberg.com/...