Following the weekend rumour that Sony had nixed delivery of electronic goodies to Circuit City amid credit concerns comes the official notice today that the electronics retailer is in deep financial woes.
The company announced today that they plan to shut down 155 of their stores and cut back on future store opening. While the press release doesn't mention Sony by name it does touch on the bigger issue of getting stock.
"Additionally, the recent disruption in the financial markets has contributed to certain of the company's vendors experiencing insurmountable challenges with obtaining credit insurance for the company's purchases. As a result of this and other considerations, certain of the company's vendors have set more restrictive payment terms than in previous quarters, including in some cases requiring payment before shipment. Vendors also have limited the credit available to the company for purchases, including in some cases not providing customary increases in credit lines for holiday purchases. 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."
I've contacted SCEA for comment and will make sure to update the story if and when we hear word about whether Sony really did stop delivery of merchandise in transit to Circuit City distribution centers.