Ailing electronics retailer Circuit City filed for bankruptcy protection Monday ahead of the traditionally strong holiday season, a further indication that the economy is faltering.

In mid-morning trading on the New York Stock Exchange, shares of Circuit City fell $.14, or 56 percent, to $.11. Shares in Circuit City have fallen from their 52-week high of $8.24 as the company’s prospects have dimmed.

Though Circuit City, which operates 712 superstores, may survive in a weakened state, the bankruptcy signals a squeeze on the bricks-and-mortar retail channel for electronics in the United States. Big-box retailer BestBuy, Circuit City’s most direct rival, stands to benefit as would multi-line stores like Wal-Mart and Target.

Circuit City Chief Financial Officer Bruce Besanko cited “erosion of vendor confidence,” “decreased liquidity” and “a global economic crisis” as the primary factors in the filing for Chapter 11 protection.

The filing in the U.S. Bankruptcy Court for the Eastern District of Virginia also revealed that the company was pinning its hopes to avoid a bankruptcy filing on a $75 million tax refund from the Internal Revenue Service. When the check didn’t arrive, the company said it was forced to make the filing.

The company, based in Richmond, Virginia, has about 39,600 employees. Circuit City generated revenue of about $11.7 billion in the fiscal year ended February 2008, but net losses were $319.9 million.

In 2003, Circuit City rejected a proposed buyout from Mexican billionaire Carlos Slim Helu.

“At the insistence of its largest shareholder, HBK Investments,” according to the filing, Circuit City let Blockbuster review its books and in April the movie-rental chain went public with a takeover offer worth about $1 billion. By July, however, Blockbuster pulled back from the deal as the economy soured.

In November, Circuit City said it would close 155 stores and lay off more than 15 percent of its workers.