Our Bankruptcy Attorney Blog

Reports are coming out today that Circuit City may consider shutting at least 150 stores and cut jobs to avoid filing for bankrutpcy. This move by Circuit City is not surprising as retail sales fell 1.2% in September and I bet that when October numbers come out retail sales willl probably be off closer to 2%. Retailers all over (except maybe WalMart & Costco) are going to have an extremely tough stretch coming up over the next 6 months as consumers ratchet back their spending and focus on the bare essentials.

Here is part of the story excerpted from MarketWatch (click here for the original):

Circuit City has hired Skadden, Arps, Slate, Meagher & Flom LLP, which oversaw Kmart’s Chapter 11 reorganization, as its bankruptcy counsel. The company also has retained FTI Consulting Inc. to develop a turnaround plan and investment bank Rothschild Inc. to guide talks with banks and secure emergency financing, the Journal reported. See related MarketWatch First Take commentary.

“While we would appreciate [Circuit City] for its attempt to stay solvent, we remain highly pessimistic on holiday sales and on consumer spending in 2009,” said Standard & Poor’s analyst Michael Souers.
A filing from Circuit City would make it the largest retailer to enter bankruptcy protection in several years, the paper reported. Retailers that have filed for bankruptcy protection this year include Linens ‘n Things, Mervyn’s and Sharper Image.

“We’re not going to speculate on rumors and comment beyond our original statement,” said Circuit City spokesman Jim Babb in a response to emailed questions.

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.