Circuit City short-circuit; 150 stores could close, thousands of jobs could go

October 20, 11:34 AMBusiness ExaminerDarrell Proctor

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There's been plenty of turmoil in the electronics industry in recent years, and the economic slowdown could be about to claim another victim.

Reports say Circuit City is ready to close at least 150 stores and cut thousands of jobs as it seeks to avoid bankruptcy.

The Wall Street Journal says Circuit City has hired Skadden, Arps, Slate, Meagher & Flom LLP as its bankruptcy counsel. That company was in charge of Kmart's Chapter 11 reorganization.

The Journal said Circuit City has retained FTI Consulting Inc. to help develop a turnaround plan, and asked investment bank Rothschild Inc. to secure emergency financing.

Circuit City is not alone among struggling retailers. Sharper Image and Linens 'n Things are two others who this year have filed for bankruptcy protection.

Circuit City's stock has been trading well below $1 recently; it's lost 90 percent of its value this year.

The company said that as of Aug. 31 it had 714 U.S. stores, with another 772 stores and dealer outlets in Canada. It employs about 45,000.