Consumer Alert: Circuit City files for bankruptcy protection

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Circuit City admits its finances have shorted out.

The electronics retailer has filed for Chapter 11 bankruptcy protection, saying it was facing pressure from vendors who threatened to withhold products during the holidays. For more details, click here.

Chapter 11 allows businesses to reorganize, but some analysts question whether Circuit City can emerge intact. Other retailers that filed for Chapter 11 this year have ended up liquidating their entire operations amid the sagging economy.

Last week, the company said it would close about 20% of its more than 700 U.S. stores and fire about 17% of its employees by the end of the year. It began liquidation sales Wednesday at the 155 stores it is closing nationwide, including 24 in California. Outlets in Southern California that are closing include: City of Industry, Compton, Escondido, Fontana, Foothill Ranch, Mira Loma, Moreno Valley, Murrieta, Pomona, Riverside, Thousand Oaks and Vista.

Consumers holding Circuit City gift cards or store credits should hustle over and spend those suckers now, experts advise.

-- Julie Makinen

AFP