Circuit City, the large electronics chain, has filed for bankruptcy on November 10th. The mega-chain of stores attempted to slash expenditures by closing 155 stores and knocking off 17% of its work force. These drastic cuts were not enough to save the dwindling company from bankruptcy.
Circuit City explained that "erosion of vendor confidence, decreased liquidity and a global economic crisis all played a key roll in the down fall of the company." All of this along with no liquidity in its assets caused the mega-chain to buckle.
How will this affect that average consumer? In part, not much will be noticed unless you live near one of the closing stores. If you do, be prepared to see a liquidation sale and if you don't, the stores will continue to operate as normal thanks to a 1 billion dollar credit line that has been extended to Circuit City.
Bestbuy has also planned to potentially buy up closing Circuit City stores where it currently does not have a presence. At least for the areas affected by the store closing it may not mean a loss of jobs to the area. With Circuit City on the brink of disaster the consumer will be impacted the most. With Bestbuy and Walmart growing stronger everyday the barrier to enter the market becomes that much harder.
With less choices it gives more room for the remaining competitors (Bestbuy and Walmart primarily) the option of not being as price competitive as they once were. While both do sell the same electronics many people would prefer to shop at Best Buy rather than Walmart to buy their new TV.
With any hope the Bankruptcy Court will be able to turn around Circuit City. The company has been left in shambles do to poor leadership and even worse training of its employees.
Download: Store Closing List (PDF)