Circuit City closing 155 stores

Plus cutting 17% of US workforce

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3 November 2008 15:50 GMT / By Katie Scott

The American retail chain Circuit City has been hard hit by the credit crunch and has admitted it is going to have to shut down 155 stores.

The retailer, which had an unsolicited, and eventually unsuccessful, takeover bid from Blockbuster earlier this year, is struggling in the face of competition from the likes of Best Buy.

It has admitted that 17% of its 46,000 strong US workforce will lose their jobs with the store closures.

The retailer pointed to the fact that some suppliers are not making it pay for inventory before they will make shipments.

"While management is working diligently to secure the support of its vendors and believes it has maintained good relationships with these important partners, the current mix of terms and credit availability is becoming unmanageable for the company", it said in a statement.

Closing down sales are to start in selected stores on 5 November.

The company has also announced that it has suspended new store openings during the 2010 fiscal year.