OCT. 20, 2008 • The Wall Street Journal reported that Circuit City was mulling over the closure of up to 150 locations, plus cutting additional jobs at the stores that remain. The retailer is attempting to secure emergency financing, but is finding the task difficult as a result of the current liquidity crisis. On Nov. 10, the retailer announced it filed for Chapter 11 bankruptcy protection. Due to declining sales at its 566 stores, Circuit City recently saw its suppliers cut off credit to the retailer while demanding cash up front for all future shipments.
Impact: Circuit City has been struggling for several years and now appears to be on life support. The consumer electronics chain simply could not compete with Best Buy and an increasing electronics focus at mass merchants like Wal-mart. For the video game industry it is just another clear sign that in the U.S. retail distribution is firmly controlled by a handful of large retail chains.
