"At the same time," he said, "it's just a little bit convenient in this market to have fewer competitors."
Circuit City's filing comes a week after it announced plans to close 155 stores and renegotiate leases. None of 17 stores within 40 miles of Center City Philadelphia is on the chopping block. The firm operates 770 stores in Canada.
With yesterday's filing, the company said it would cut an additional 700 headquarters and regional positions - reducing its workforce a total of 20 percent, or as many as 7,300 employees.
Circuit City said it filed for bankruptcy to assure vendors shipping for Black Friday and the holiday shopping season that they would get paid. Their payments will come from the chain's $1.1 billion debtor-in-possession financing revolving-credit facility negotiated to provide working capital.
The company, which said it had $3.4 billion in assets and $2.32 billion in liabilities as of Aug. 31, is hoping to exit court protection by early summer 2009. Its biggest creditors are its vendors, including Hewlett-Packard, Samsung, Sony, Zenith and Toshiba.
Circuit City, which will operate 566 stores in the United States after the closings, has been struggling for several years. Its shares fell 15 cents to 10 cents a share yesterday before trading was halted.
In 2007, Circuit City made headlines in human-resources trade magazines when it announced that, to save money, it would lay off 3,400 of its highest-paid salespeople, replacing them with lower-cost hourly workers.
Tweeter, which has 94 stores in 19 states, including eight in this area, is on its second bankruptcy. It filed its first in June 2007 and was bought by a private-equity firm.
In 1996, Tweeter entered the Philadelphia market by acquiring Bryn Mawr Stereo & Video, a long-standing local company with 13 stores.
Last weekend, workers carrying signs promoting liquidation sales with 40 percent reductions were pacing the roads outside some of the Tweeter stores, Cole said.
"I've been in business for 30 years, through three recessions, and I never cheer for people to go out of business," he said. "It's not good for the industry. I'm hanging in, but it's hard."
A Timeline
1949: Samuel S. Wurtzel opens Wards Co., in Richmond, Va.
1961: Wards goes public, selling 110,000 shares at $5.375 each.
1984: The name changes to Circuit City Stores Inc
1990: Sales hit $2 billion.
Yesterday: The company files for bankruptcy.
SOURCE: Associated Press
Contact staff writer Jane M. Von Bergen at 215-854-2769
or jvonbergen@phillynews.com.
This article contains information from the Associated Press.
