Merely a week after closing down 155 retail stores in 28 states and announcing plans to cut around 17% of its staff, Circuit City has filed for chapter 11 bankruptcy protection and obtained a $1.1 billion credit lifeline to battle a sharp decline in sales. The retailer said it'll continue operating "without interruption" as management focuses on developing and executing a comprehensive corporate restructuring plan.
The credit replaces Circuit City's current asset-based credit facility and will provide additional immediate liquidity to pay vendors and other suppliers while the company reorganizes. No additional store closings were announced, but the company did say it will eliminate some 700 more positions in an effort to cut costs. Circuit City's Canadian operations will also be seeking bankruptcy protection under the Creditors Arrangement Act in the country.