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The electronic retailer Circuit City files for bankruptcy
Circuit City, the largest US electronic goods retailer filed for bankruptcy yesterday, admitting a tough struggle to convince the suppliers to keep its stores for the holiday season. The company had already announced the closing of 155 of its 700 stores, which announced liquidation sales. This closure will cut 17% of its workforce in the coming two months. And an additional cut of 1,300 jobs including management.Circuit City employs 40,000 people across the country. The retailer had been reporting losses for the last two years which withdrew as the credit climate worsened. It has been rejecting buy out offers since 2003 : the Mexican billionaire Carlos Slim with $ 1.65bnin 2003, cash buy out offer from Highfields Capital hedge fund with $3.25bn in 2005, and earlier this year an offer by Blockbuster, the video rental chain with $1bn. The retailer had $3.4bn of assets and $2.32bn of debt, and 100,000 creditors. Bruce Besanko chief financial officer said’ Over the past several months consumers have been unable to borrow funds through credit cards, let alone home equity loans, to purchase household and other electronic.’