Jan. 20--The nation's second-biggest consumer electronics retailer said last week it is closing down operations.

Circuit City Stores Inc. filed for Chapter 11 bankruptcy protection in November. Last Friday, the company said it had failed to find the financing it needed to continue operating.

The Richmond, Va., company operates 567 stores in the United States, including one in Cranston. It also runs stores in nearby Massachusetts, in Seekonk, North Attleboro, North Dartmouth, Foxboro and Brockton, and in western Connecticut. The company had already closed 155 U.S. stores last year as it tried to cope with its deteriorating finances.

Circuit City also has about 765 outlets in Canada. Overall, it employs about 34,000 people.

In a statement released by the acting chief executive officer for Circuit City, vice chairman James A. Marcum wrote:

"Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders, so this is the only possible path for our company."

The company began a going-out-of-business sale last Saturday with discounts of up to 30 percent. The liquidation sale is being handled by four firms, including two Massachusetts operations: Hudson Capital Partners, of Newton, and Tiger Capital Group, of Boston. The sale is likely to continue into March.

Circuit City will honor gift cards during the liquidation but all purchases are final.

The company is the latest in a string of bankruptcies befalling regional and national retailers.

Canton, Mass.-based electronics retailer Tweeter Etc., gadget shop Sharper Image, home-goods store Linens 'N Things, and apparel store Steve & Barry's are just a few of the more-recent closings.

Circuit City filed for bankruptcy Nov. 10, after posting a quarterly loss of $240 million.

The retailer had been struggling for years with intense competition from other electronics retailers, both traditional rivals such as Best Buy and Wal-Mart and online operations. Circuit City seemed to have lost its footing about 20 months ago when company executives decided to fire the most highly productive sales staff to save money on commissions.

The move was designed to reduce expenses last year by $110 million and trim $140 million in annual spending this year. The decision was roundly criticized as shortsighted.

"Firing 3,400 of arguably the most successful sales people in the company could prove terrible for morale," Colin McGranahan, an analyst with Sanford Bernstein & Co., wrote in a research note at the time.

About a decade ago, Circuit City was the nation's largest chain of consumer electronics stores. But Richfield, Minn.-based Best Buy, with prime locations and a sharp focus, overtook the retailer in the mid-1990s. Even in Richmond, Circuit City's headquarters city, Best Buy opened larger, more vibrant stores that drew crowds of shoppers.

As it struggled to compete, Circuit City turned down buyout offers from at least two private entities.

With little debt and more than $750 million in cash, Circuit City was considered ripe for takeover by 2003. The company turned down a bid of $8 per share from Mexican tycoon Carlos Slim that year.

In 2005, it turned down a $3.25-billion offer from Boston investment firm Highfields Capital Management LP.

-----

To see more of the The Providence Journal, or to subscribe to the newspaper, go to http://www.projo.com.

Copyright (c) 2009, The Providence Journal, R.I.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

CC, TWTR, SHRP, LIN,

A service of YellowBrix, Inc.