Andre Yoskowitz
24 Dec 2008 15:59
According to an attorney for the company, Circuit City sales have fallen 50 percent since the electronics chain filed for Chapter 11 bankruptcy over a month ago.
The company had projected a decline of 28 percent and had forecasted that projection into their budget. Yesterday, the court approved a $1.1 billion USD revolving credit line for the retailer in hopes that it can get out of Chapter 11.
Circuit City spokesman Bill Cimino added that the weak sales “should not be considered a negative,” considering the economic recession. He also noted that the company was improving its gross margin rate which was helping offset the sales decline.
Not everyone sees the numbers as a positive however. Retail consultant and investment banker Howard Davidowitz said it would be nearly impossible for the company to get out of bankruptcy protection given the harsh terms of the loan and the "collapse" of the retailer's customer base.