The retailer has hired Goldman Sachs as an advisor is a possible sale. Circuit City has already closed 55 stores in Canada this year, and executives plan to close 10 more in the first half of the current fiscal year. The company acquired InterTan in 2004.
Circuit City is also slashing the positions of 3,400 employees that are "paid well above the market-based salary range for their role," according to a company statement. The retailer will hire new workers to fill those spots at lower wages.
Management expects these changes will save the company about $110 million during the current fiscal year and at least $140 million annually thereafter. In the short term, they are forecasting $92 million in pre-tax expenses for the fourth quarter, the results of which will be reported on April 4.
In its most recently-reported quarter, which ended Nov. 30, same-store sales rose 5.1% year over year, while net sales rose 6.9% to $3.1 billion. However, the company reported a $16-million loss. Circuit City operates 643 stores across the country.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.