I hope Hewlett Packard Wasn’t counting on that $120 mil

Bloomberg.com: Worldwide

The chain sought Chapter 11 protection in U.S. Bankruptcy Court in Richmond, Virginia, today after suppliers concerned about declining sales at almost 1,500 U.S. and Canadian stores cut off credit and demanded up-front cash for shipments. The company owes $119 million to Hewlett-Packard Co., the world’s largest maker of personal computers, and $116 million to Samsung Electronics Co., the top maker of flat-panel displays, according to a filing.

Circuit City has $1.1 billion in bankruptcy financing now; I wonder if BoA is going to see that money again either. The value of big retail space these days is kinda not very high, and the value of electronics goods on site declines pretty rapidly with time. If they have a good christmas season they might be able to wind things up in an orderly way, but I’m betting that their claimed $3.4 billion in assets turn out to be optimistic. It’s sad. But at least in the meantime people get to keep collecting salaries…

I think the US is going to be confronting more of this in the coming years — we just don’t need that many big-box electronics retailers unless they can add value instead of subtracting it. Much as we just don’t need that many automobile plants. We need lots of other things, but not those.

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