X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(For more retail coverage, click GlobeSt.com/RETAIL.)

RICHMOND, VA-Circuit City Stores Inc. plans to close 69 stores throughout the world as part of a plan to improve its financial performance. Seven of those stores will be located in the US while the remaining will be throughout the retailers international portfolio.

“Because of the intensified gross margin pressures that we saw in the third quarter within the flat panel television category, we launched efforts to accelerate the timing of planned initiatives to improve sales and gross margin, as well as improve the efficiency of our expense structure,” says Philip Schoonover, chairman president and CEO of Circuit City, in a statement.

By the end of this month, Circuit City expects to have closed all seven of the Superstore locations in the US. Total the stores brought in $71 million worth of revenue in 2006. This makes them cash flow negative or low cash flow locations according to a release on the decision. The exact location of the closing stores was not identified.

A distribution center in Louisville, KY, which houses store fixtures and signage, will also be shuttered.

Internationally, 62 under-performing locations will close. Previously the company announced plans to sell back 92 Rogers Plus stores to Rogers Wireless Inc. According to Circuit City executives, the two decisions will remove the company from one region and four districts.

The internal leadership of the company has also undergone changes. Douglas Moore, EVP and chief merchandising officer is no longer with the company and David Mathews will now lead the merchandising marketing, services and supply chain teams. The changes are meant to improve execution and accountability.

Beyond stores closing and leadership changing, Circuit City could see other changes in the next couple months. “Other recommendations are being developed, and we expect to implement them over the next six months,” Schoonover says. “The steps we are taking today represent the initial efforts toward getting our cost structure more in line with today’s marketplace.”

Circuit City’s stock rose more than a dollar to $21.67 by the end of the business day. Circuit City has more than 600 stores throughout the US and 900 stores outside the country. According to the company’s most recent annual report, filed last April, net sales totaled $11 billion in the US and $623.7 million internationally.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. NET LEASE Spring 2021Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt. NET LEASE Awards 2021Event

These awards honor the industry's most influential and knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.