Circuit City to close 155 stores
Circuit City Stores announced Monday it plans to close 155 stores and lay off 17 percent of its workforce in the U.S., as it aims to restructure its business amid a tightening credit market and downturn in business.
Over the past few weeks, the retailer's financial health has become more dire and, according to a report in The Wall Street Journal, was considering restructuring moves as a means to avoid a Chapter 11 reorganization bankruptcy filing.
(Credit:
Circuit City Stores / Richard Cadan Photography)
The struggling electronics retailer noted in its announcement that not only have its sales dropped amid an economic slowdown and loss in consumer confidence, but also its suppliers have begun cutting back on the level of credit they are extending to the retailer.
"The current mix of terms and credit availability is becoming unmanageable for the company," Circuit City noted in its announcement.
That cutback by suppliers comes at a critical time for Circuit City, as it heads into the holiday buying season when it wants to replenish its stock with the popular items.
The company plans to begin a liquidation sale at its 155 stores targeted for closing (PDF) on Wednesday and is expected to continue the sale through the rest of the year.
Circuit City also plans to scale back plans to open new stores to two from 12 in the current fiscal year and suspend all store openings for 2010. The company will continue to operate in 153 U.S. markets and overseas, but will be exiting 12 U.S. markets as a result of the restructuring.
Other woes for Circuit City include a potential delisting of its stock from the New York Stock Exchange. Last week, the NYSE warned the company its stock price had fallen below $1 for 30 consecutive trading days, a trigger point for a potential delisting.
The NYSE warned the company on Oct. 24 and Circuit City has 10 days to resolve the issue. One common means that companies use in this situation is a reverse stock split, in which investors who hold a certain number of shares can swap them for a single share in the issuer's stock. For example, 10 shares of stock trading at 50 cents each would become 1 share that trades at $5 a share.
Dawn Kawamoto covers enterprise security and financial news relating to technology for CNET News. E-mail Dawn. 
I haven't looked at the list of places where CC is closing stores, but I wouldn't be surprised if competition from Fry's played a role in what stores closed. When CompUSA did their first round of closing a lot of the stores that closed were near a Fry's store. Except for BB, Fry's has steamrolled most of their competition. I can never quite figure out why BB is popular. My only inference is that people think that BB has the best prices. It sure isn't because they have the best customer service.
Each store attracts different types of customers.
I rarely buy any electronics at brick-and-mortar stores anyway. They're really only helpful if I want to see an item in person before I purchase it online.
HMK
Also, CC has a horrible SOP system. At my old store #3508, they have a supervisor for car install who doesnt even have a drivers license. They are killing themselves with the decisions corporate makes on running the stores...
thats why I moved to BBY.
We need good mid-size electronics stores, anybody?
Not to dismiss the temporal pain of the employees that get caught in the shuffle; it is a serious pain to get laid off. Though at this time of year, there's gonna be at least *some* seasonal work, so it ain't all black for you guys either.
Thank You.
ps-Employees, you did the best you could, considering the circumstances. Good Luck.
Happy Trails CC
- by 1kingsfan November 5, 2008 11:39 AM PST
- Hey "Iceman" have you been into a Best Buy lately? Those "coached lines" are used by retailers all over the place! The fact of the matter is most people are completely dissatisfied either way. If I go up and greet you in a timely manner and ask if I can help you find anything you think I'm "preying on you". When I back off most consumers tell "HORROR" stories about how employees are impossible to find.
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Showing 1 of 2 pages (32 Comments)I'm sure you've had these terrible experiences everywhere you've been. What always makes me laugh is that there is a Frys just down the road from where my CC is. I ALWAYS match Frys prices on every single item a customer asks me to. What's funny is that customers CLEARLY want Frys prices but don't want to deal with the hassle of their so-called "customer service" or their return policy. Soooo good luck if CC closes....Frys has the worst customer service I've ever seen....and when prices go up I'm sure I'll be seeing other unwarranted comments from you about how prices are too high...