Circuit City closes down 155 stores
You know times are hard when giant companies start to trim down their operational costs by laying off workers, or even worse, closing down stores. Circuit city Stores, Inc., is one of them, and they have decided to act now rather than regret later by making some restructuring moves which includes closing down 155 domestic segment stores, reduce future store openings and while renegotiating certain leases aggressively. The company itself is open to all available options and alternatives where restructuring its business is concerned.
Some of the factors cited by Circuit City Stores, Inc. that forced it into such moves include waning consumer confidence as well as a significantly weakened retail environment which has negatively impacted the company’s overall sales and gross profit margin rate to a much higher degree compared to what was anticipated by the management previously. In addition, the recent economic turmoil that has spread worldwide has caused some of Circuit City’s vendors to take restrictive actions with respect to payment terms, squeezing the amount of credit made available to the company. Also, those vendors themselves are experiencing troubles of their own, including obtaining credit insurance for the company’s purchases. Guess the normally efficient federal government is to bear some of the blame as well, since the company has yet been unable to collect an income tax refund of approximately $80 million which it believes the federal government owes.
A total of 155 Circuit City stores that are underperforming and deemed to be unable to fit in with the company’s overall strategy will be closed, and these identified stores are located across 55 US media markets, and Circuit City themselves will exit 12 of these US media markets themselves. The list of closing stores are available here, so head on there to find out whether your local Circuit City store is going to remain open come November 4th. These impacted stores will begin to offer closing sales a day after, and these sales will run until the current calendar year is over, or they have nothing else left to sell – whichever comes first. Guess this is a good time to those who are looking for a bargain, eh?