Circuit City has had a rough year. We know that, but the bankrupt electronic retailer was granted a breath of fresh air today as a Judge approved $1.1 billion in financing and other changes which might involve closing a lot more locations.
The new package from Bank of America replaces the $1.3 billion loan backed by the company assets. This money will allow the retailer to continue operations and keep paying employees their dismay wages.
In addition to the new round of financing, the judge is allowing Circuit City to break a bunch of agreements between employees and service contracts alike. Most notably is the agreement that involved paying 40 employees severance packages, including former CEO Phil Schoonever who took the company and chucked it against a shit covered wall, that Circuit City can now void.
There is more though. It seems that part of the ruling allows Circuit City to break leases on buildings and such. Does this signal more store closings are coming?
Circuit City now plans to break a total of 304 leases. That includes 150 leases it had already received approval to break earlier this month for places where it no longer operates stores, which the company said cost $40 million annually.
Circuit City operated 670 retail locations before it closed 155 of them in November. If the company plans on closing another 150-odd stores, that would only 370 locations. Now, some of those leases could be warehouses and other facilities, but those cannot account for all of ’em. The last round pulled the retailer out entirely of some markets and another round could leave even more areas without a Circuit City. Not that Best Buy – or most consumers – would mind.
More details are sure to drop soon and we’ll pass ’em along as they become available. Any disgruntle Circuit City employee can always drop a comment below for a real-life account of what’s going on at the City.