Richmond, Va. Circuit City Stores said Wednesday it plans to break the leases for almost all of the 155 stores it plans to close this month.
The company was scheduled to auction the leases on Thursday as part of its Chapter 11 bankruptcy-protection proceedings. However, too few bids came in to hold the auction, due to the tough state of the market right now, the company said.
Circuit City filed for federal bankruptcy protection last month as it faced mounting debt, pressure from vendors, a drop in consumer spending and heightened competition. Its Canadian operations filed for similar protection.
The company had hoped to sell the leases to reduce its costs, help it get financing and aid its restructuring, it said in court documents. Monthly expenses for the leases are about $6 million. The leases had an average of about 10 years remaining, a company spokesman said.
It now plans to break a total of 304 leases, including 150 it received approval to break earlier this month for locations where stores closed previously.
Circuit City announced plans in early November to close 155 of its more than 700 existing U.S. stores by Dec. 31 and lay off about 17% of its domestic work force, or up to 7,300 people. The affected stores are spread across 28 states, including multiple locations in Phoenix, Atlanta and other areas.