Wal-Mart credited with Circuit City meltdown plus others

[liberal N proud]

The 'Wal-Mart effect' strikes again

Last "Black Friday," for its annual post-Thanksgiving sales blitz, Wal-Mart Stores (WMT, news, msgs) decided to slash the price of one of the hottest electronics items for the holidays, the 42-inch flat-panel TV, to $988.

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In turn, Wal-Mart's move caused a free fall in prices of flat-panel televisions at hundreds of retailers -- to the glee of many people who were able to afford their first big-screen plasma or liquid-crystal-display (LCD) model.

Now, it is becoming apparent that Wal-Mart's calculated decision to break the $1,000 barrier for flat-panel TVs triggered a disastrous financial meltdown among some consumer-electronics retailers over the past four months.

The fallout is evident: After closing 70 stores in February, Circuit City Stores (CC, news, msgs) on March 28 laid off 3,400 employees and put its 800 Canadian stores on the block. Tweeter Home Entertainment Group (TWTR, news, msgs), a high-end home entertainment store, is shuttering 49 of its 153 stores and dismissed 650 workers. CompUSA is closing 126 of its 229 stores, and regional retailer Rex Stores (RSC, news, msgs) is boarding up dozens of outlets, as well as selling 94 of its 211 stores.

http://articles.moneycentral.msn.com/Investing/Extra/WalMartEffectStrikesAgain.aspx#