Circuit City, Chapter 11

For several years, Circuit City has been struggling to compete with Best Buy, Wal-Mart, and all of the low cost internet retailers. If I remember correctly, management once cut it's showroom salesforce in an effort to shed costs. But that led to significantly lower sales.

Internal Credit Crisis
A few months ago, a credit agency recommended that vendors not supply Circuit City with goods. Why? If you sent a truckload of TVs to Circuit City, there was a pretty good chance you might not get paid.

External Credit Crisis
This was followed by the global credit freeze we saw in October. Some vendors, who were willing to supply Circuit City, were now facing their own financial problems. Customers were now unable to finance those purchases.

Last week, management announced it would close 155 stores--20%--across the U.S. Today it filed for Chapter 11 bankruptcy protection.

Clock Is Ticking
Now they have to scramble to get their shit together. If they don't get it done, then keep your eyes and ears open for a Linens-N-Things-style liquidation sale.