Consumer electronics manufacturers, suppliers and retailers watched as Circuit City and Tweeter reacted to the economic downturn this week.
Citing a deteriorating economy and tightened credit limits by its suppliers, Circuit City said it would close 155 of its stores and lay off thousands of employees. Circuit City, the second-largest CE chain in the U.S. by sales after Best Buy, has 721 stores in the country and more locations in Canada.
Circuit City planned to reduce about 17% of its workforce and cut operating, payroll and marketing expenses. It employs about 55,000, including temporary holiday help. The Associated Press reported that the moves “renewed the specter of bankruptcy hanging over the Richmond, Va.-based company as it heads into a holiday shopping season that could determine its future.”
Tweeter, meanwhile, will close. It is planning to liquidate its merchandise and will stop high-end installation services on Nov. 14. Tweeter, founded in Boston in 1972, filed for Chapter 11 bankruptcy protection just over a year ago with about $165 million in debt.
Though Schultze Asset Management bought Tweeter’s assets in 2007 for $38 million, deteriorating economic conditions and stiffening competition undermined attempts to save the electronics retailer, analysts told The Boston Globe.