Make us your home page
Instagram

Circuit City closing 155 stores, 7 in Florida

RICHMOND, Va. — Circuit City Stores Inc. said Monday it is pulling the plug on about 20 percent of its U.S. stores in an effort to return the nation's No. 2 consumer electronics retailer to profitability.

The Richmond, Va., company said it will shutter 155 of its more than 700 stores in 55 markets, including Phoenix and Atlanta, by Dec. 31, laying off about 17 percent of its domestic work force.

The closings will hit seven stores in Florida, including two in Jacksonville and one each in Naples, Orlando, Panama City, Tallahassee and Vero Beach.

Circuit City also said it will further reduce new store openings and plans to work with landlords to renegotiate leases, lower rent or terminate agreements.

The company said it expects the stores it is shuttering, which generated about $1.4-billion in net sales in fiscal 2008, will not open on Tuesday and store closing sales will begin on Wednesday.

The move comes as Circuit City heads into a crucial holiday shopping season that could determine its future, amid a slowdown in consumer spending that has even the least vulnerable retailers worried.

"The weakened environment has resulted in a slowdown of consumer spending, further impacting our business as well as the business of our vendors," James A. Marcum, vice chairman and acting president and chief executive officer said in a statement. "The combination of these trends has strained severely our working capital and liquidity."

Marcum called the decision to close stores "difficult, but necessary."

Circuit City also provided updates on other aspects of its business, including restrictive actions taken by vendors, including limiting credit for purchases. But the company said while it is working to secure support from vendors, the "current mix of terms and credit availability is becoming unmanageable for the company."

It also said it has been unable to collect an income tax refund of about $80-million that Circuit City believes it is owed from the federal government.

The company has had only one profitable quarter in the past year, posting a wider second-quarter loss in September with a 13 percent decline in sales at stores open at least a year. Its results have weakened as the company faces significant declines in traffic, heightened competition from rival Best Buy Co. and others and a weakened brand position.

Circuit City, which is reviewing its operations while exploring strategic alternatives, has been working with advisers to determine how to substantially improve its operating and financial performance.

The company said last week that the New York Stock Exchange has warned it that its stock price is not high enough for continued listing.

The NYSE said Circuit City shares had an average closing price of less than $1 over 30 consecutive trading days as of Oct. 22, falling short of the exchange's requirement. Its shares have closed under a dollar in trading since Sept. 30, when they closed at 76 cents. Shares have traded between 17 cents and $8.24 in the last year.

In order to regain compliance with the NYSE, Circuit City's common stock share price and the average share price over a consecutive 30-trading-day period must both exceed $1 within six months following receipt of the notice.

A major Circuit City shareholder — Classic Fund Management AG, a Liechtenstein asset management company — also said in a regulatory filing last week that it cut its holdings to 8.2-million shares, or about 4.8 percent, from 9.5-million shares, or 5.6 percent. It did not disclose a reason for the change.

Circuit City has been under new leadership since late September when Chief Executive Philip J. Schoonover agreed to step down. He was replaced by Marcum, who was tapped to oversee Circuit City's multiyear turnaround efforts.

Circuit City closing 155 stores, 7 in Florida 11/03/08 [Last modified: Monday, November 3, 2008 11:46am]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Massachusetts firm buys Tampa's Element apartment tower

    Real Estate

    TAMPA — Downtown Tampa's Element apartment tower sold this week to a Massachusetts-based real estate investment company that plans to upgrade the skyscraper's amenities and operate it long-term as a rental community.

    The Element apartment high-rise at 808 N Franklin St. in downtown Tampa has been sold to a Northland Investment Corp., a Massachusetts-based real estate investment company. JIM DAMASKE  |  Times
  2. New York town approves Legoland proposal

    News

    GOSHEN, N.Y. — New York is one step closer to a Lego dreamland. Goshen, a small town about fifty miles northwest of the Big Apple, has approved the site plan for a $500 million Legoland amusement park.

    A small New York town, Goshen approved the site plan for a $500 million Legoland amusement park. Legoland Florida is in Winter Haven. [Times file  photo]
  3. Jordan Park to get $20 million makeover and new senior housing

    Real Estate

    By WAVENEY ANN MOORE

    Times Staff Writer

    ST. PETERSBURG —The St. Petersburg Housing Authority, which bought back the troubled Jordan Park public housing complex this year, plans to spend about $20 million to improve the 237-unit property and construct a new three-story building for …

    Jordan Park, the historic public housing complex, is back in the hands of the St. Petersburg Housing Authority. The agency is working to improve the 237-unit complex. But the latest plan to build a new three-story building for seniors will mean 31 families have to find new homes. [LARA CERRI   |   Tampa Bay Times]
  4. Coming soon at two Tampa Bay area hospitals: a cancer treatment that could replace chemo

    Health

    A new cancer treatment that could eventually replace chemotherapy and bone marrow transplants — along with their debilitating side effects — soon will be offered at two of Tampa Bay's top-tier hospitals.

    Dr. Frederick Locke at Moffitt Cancer Center in Tampa is a principal investigator for an experimental therapy that retrains white blood cells in the body's immune system to fight cancer cells. The U.S. Food and Drug Administration approved these so-called "CAR-T" treatments for adults this month. In trials, 82 percent of cases responded well to the treatment, and 44 percent are still in remission at least eight months later, Locke said. [CHRIS URSO   |   Times]
  5. Regulator blasts Wells Fargo for deceptive auto insurance program

    Banking

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.
[Photo by Spencer Platt/Getty Images, 2017]