Circuit City Part II… Don’t Call It A Comeback…
For Circuit City, the closing of 155 of their stores was just the beginning. Welcome to Round Two, the much anticipated Chapter 11 protected bankruptcy, in which Circuit City’s former suppliers and employees will be taking it in the *bleep*. According to the Chapter 11 filings, Circuit City owes Hewlett-Packard Co. more than $118 million, $116 million to Samsung Electronics, and $60 million to Sony. Circuit City said it had $3.4 billion in assets and $2.3 billion of debts as of Aug. 31 – although I am not sure what that translates to in real world dollars today … Call me a pessimist but I think this would be a pretty hard sell to keep this a reorganization and not a liquidation. Can a company that’s been bleeding money this long convince struggling manufacturers to extend them credit and trust TWICE in today’s economic times? Is there enough KY in the world to ease this pain? Hey maybe they can get a couple of billion from the government’s 700 Billion Bailout Tour? I mean 2-3 billion is chump-change compared to the amount of money being pissed away…
CC scores a 1.1 billion credit line from BoA, and there is much rejoicing. But puzzle me this… Since their profits came largely from selling warranty contract extensions, will people still buy those from a company thats on the brink of death going through a “reorg”? I believe their already not very shiny brand has been tarnished. Their customers are already happily shopping Best Buy, Wallmart, Amazon, NewEgg for real bargains, and not for those decided and priced by liquidators.
They have a chance of making it still. just like obama has a chance of changing the course of the usa