Circuit City in credit crisis
FROM TWICE: Closing 155 stores
By Alan Wolf of TWICE -- Video Business, 11/3/2008
NOV. 3 | FROM TWICE: Circuit City said new credit and payment terms imposed by vendors are becoming “unmanageable” for the company, making it difficult to order holiday inventory and prompting it to close 155 stores and exit 12 markets in an effort to save cash.Vendors tightened their terms in reaction to Circuit City’s worsening liquidity situation, as the economic downturn impacted sales and margins more severely than management had anticipated, the company said.
The recent turmoil in the financial markets has also made it virtually impossible for some of its vendors to obtain credit insurance from factors on Circuit City’s purchases, the retailer said.
As a result, key vendors are requiring payment up front and have curtailed their holiday credit lines.
Read the full story on TWICE.com.
