Circuit City Closing 19 Stores
By Alan Wolf -- TWICE, 2/9/2004
Richmond, Va. — Circuit City will close 19 underperforming stores in 12 states on Feb. 23.
Chairman/CEO Alan McCollough said the affected trade areas 'can no longer support' the stores, which have 'no reasonable expectation of positive cash flow in the near future.' Most of the designated stores are located near other Circuit City units, the company said.
The 19 stores, which had combined revenues of $151 million for calendar year 2003, are closed today in preparation for closeout sales of display merchandise beginning tomorrow, Feb. 10. McCollough said the decision was difficult due to the impact on employees, but will allow the company to 'better focus attention on improving the performance of the other 600 stores.'
Circuit City will also relocate seven stores this month, as part of its plan to relocate 18 units in fiscal 2004. The company also anticipates opening 65 to 70 stores in its next fiscal year, after which approximately 30 percent of its store base will be relocated, newly constructed or fully remodeled since fiscal 2001.
The company said it would likely incur about $35 million in after-tax expenses in the current quarter as a result of lease terminations, fixed-asset disposals, severance and other costs related to the closings.
The stores are located in Arkansas, California (Los Angeles), Florida, Georgia, Illinois, Indiana, Ohio, Minnesota, Missouri, Texas, Virginia and the state of Washington.
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