Circuit City files for bankruptcy

The death spiral of once proud electronics retailer Circuit City Stores (NYSE: CC) is now complete.

In a press release issued this morning, the Richmond, Virginia company announced that it had filed for Chapter 11 bankruptcy protection. There had been some speculation that Circuit City would put off a filing until after the holiday season, but the company's inability to convince suppliers to ship merchandise made that impossible:

Faced with the need to secure ongoing vendor support and to ensure adequate merchandise flow to stores during the important holiday season, the company has determined that it would be in the best interest of its stakeholders to file for reorganization relief under Chapter 11. Operating under the protection of Chapter 11 will provide the company's vendors with assurances that they will be paid for merchandise the company receives post-filing so the company can be sufficiently stocked for the holiday selling season.

The stock is trading in the 12-cent per share range, down from a 52-week high of $8.24. Back in 2006, the company's stock traded as high as $30 per share. In 2000, the shares briefly traded at more than $50 per share.

The company had already announced plans to shutter 155 domestic stores, and no additional closings have been announced. Circuit City has secured $1.1 billion in debtor-in-possession financing that will allow it to continue its operations.

Shares of Best Buy (NASDAQ: BBY) are trading up about 5% as investors anticipate an opportunity for sizable market share gains as a result of the demise of the company's biggest competitor.