Circuit City Stores Inc has announced that it would be shutting down 155 stores in the United States and undertaking major restructuring in the wake of falling cash position and stricter credit terms.

After the closure of 155 stores Circuit City will still be operating 566 outlets. Analysts believe that the measure will give Circuit City enough legroom to survive the holiday shopping season but after the next few months it might still have to seek bankruptcy protection. Along with pulling the shutters on 155 of its stores, Circuit City has also announced that it will explore all restructuring options in an attempt to cut costs. The company has already estimated that its store closings alone would cut down its US workforce by 17% which would also mean its exit from markets such as Phoenix and Kansas City.

Circuit City Stores is the second-largest chain if consumer electronic goods in United States. However it has continued to post losses in five of the last six straight quarters and has lost valuable market share to rivals like Best Buy Co and Wal-Mart Stores Inc. the company was compelled to take the step of store closures in order to deal with tightened credit terms following the global finance crisis and the consequent credit crunch