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RICHMOND, VA-The worsening economy has claimed another victim–Circuit City, the country’s second largest electronics retailer, is filing for bankruptcy, as consumer spending on discretionary items practically slows to a halt. As with most corporate bankruptcies Circuit City intends to continue operations while management develops a comprehensive corporate restructuring plan.

The company has provided ample notice to the market that it was in trouble. On Nov. 7 it announced workforce reductions of some 20%.Then, last week it announced it would close 155 domestic stores and renegotiate leases in other locations. By the time the closings are complete there will be approximately 566 stores in Circuit City’s real estate portfolio. It also hinted that other options were being explored–language that my have implied an impending bankruptcy.

Clearly these cost-cutting initiatives will continue in bankruptcy. In its announcement this morning the company said it was also taking action to realign its regional and district support structure commensurate with its smaller store base. Also, “the company will continue its real estate rationalization by taking immediate steps to reject the leases at its previously closed locations,” it said in a press release. “Further, as part of its restructuring efforts, the company will continue to assess the productivity of all assets, review additional cost-cutting initiatives and explore strategic alternatives to maximize the value of the business.”

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