Circuit City files for bankruptcy protection

Circuit City has filed for bankruptcy protection

Embattled US electronics retailer Circuit City has filed for bankruptcy protection. The company issued the Chapter 11 filing on Monday, asking the government temporarily to shield it from creditors while a reorganisation plan is enacted.

Circuit City, the second largest electronics retailer in North America behind Best Buy, said that it plans to keep its 566 stores operational for the time being.

Chief executive Jim Marcum said in a letter to customers that the company also plans to continue most of its customer programmes and services, such as returns, gift cards and extended warranties.

News of the bankruptcy filing is the latest in what has been a grim few months for Circuit City. The company attempted earlier this month to stem its financial troubles by closing 155 stores and shelving plans for new stores.

The company has around 40,000 employees, but it is not known how many will be affected by the store closures and impending reorganisation as Circuit City attempts to emerge from its Chapter 11 status.

Circuit City's woes reflect a larger trend of cuts and closures in the IT industry, which has taken its fair share of hits from the ongoing financial crisis.