Circuit City Stores Inc. is considering a plan to close at least 150 stores and cut thousands of jobs.

The plan is an alternative to filing for bankruptcy-court protection, said company officials.

Earlier this month, Circuit City hired Skadden, Arps, Slate, Meagher & Flom LLP -- the law firm that oversaw the Chapter 11 reorganization of Kmart -- as its bankruptcy counsel, company representatives said.

Circuit City also retained FTI Consulting Inc. to develop a turnaround plan and investment bank Rothschild Inc. to guide talks with banks and secure emergency financing, representatives said.

In recent days, the cash-strapped company has also been analyzing how much money it could raise by liquidating hundreds of millions of dollars in inventory.

The company's advisers are trying to line up debtor-in-possession financing, which allows a company in bankruptcy proceedings to pay its day-to-day operating expenses. So far, amid tight credit conditions, lenders have shown little interest in providing such financing to Circuit City, which has 714 stores in the U.S. and another 772 stores and outlets in Canada.

Circuit City management, investors and advisers said they are trying to avoid a bankruptcy filing before the holiday season, fearing customers might doubt the ability of a retailer involved in bankruptcy proceedings to provide warranties on products like laptop computers and flat-screen TVs.

Circuit City spokesman Bill Cimino said the company wouldn't discuss details of its plans. He stressed that many options are under consideration.

"The management team, board of directors and its strategic financial advisers are conducting a comprehensive review of all aspects of our business to determine the best methods of accelerating our turnaround," Cimino said.

If Circuit City were to file for bankruptcy, it would be the largest retailer to enter bankruptcy protection in several years. The 59-year-old company employs about 45,000 people. Last year, it posted sales of $11.74 billion.

One out-of-court solution the company is studying could lead to closing at least 150 stores and eliminating thousands of jobs, said company officials.

This would let the retailer liquidate about $350 million in inventory, officials said, which it could use to pay off certain real-estate costs, such as leases on abandoned sites. It would then hope to press existing landlords to renegotiate leases, many of which Circuit City regards as overpriced. Circuit City's investors have homed in on those leases as a threat to the company's health.

Many were negotiated when real-estate prices were booming earlier in the decade. Roughly 90 percent of the leases don't expire until 2014 or later, and about 80 are for vacant locations.

Circuit City's stock has plummeted since July, when Blockbuster Inc. rescinded an offer to buy the company for at least $6 a share. In 4 p.m. New York Stock Exchange composite trading Friday, Circuit City shares closed at 39 cents, down from a 52-week high of $8.72.

It hasn't had a profitable quarter in more than a year, officials said.

Several big retailers have filed for bankruptcy protection this year, with many of them, including Linens 'n Things Inc., Mervyns LLC and Sharper Image Corp., eventually opting to liquidate.