Circuit City will open six to eight freestanding appliance stores later this year in Florida and Richmond, Va.
The stores, representing the chain's first majaps-only format, will measure 8,500 square feet and will be located in high-traffic shopping centers near existing Circuit City locations in Southern and Central Florida and Richmond, where the company is headquartered. The retailer said the stores will carry more than 15 white-goods brands, including those currently found in its Superstores, as well as "some higher-end, specialty brands."
The stores will also feature "major appliance stations" that will allow shoppers to custom-order appliances, as well as working kitchens for cooking demonstrations, kids' play areas, and technology vignettes.
"Customers are looking for a different environment when they are shopping for major appliances," said Circuit City president Alan McCollough. "By moving appliances into a freestanding store location, we believe that we can devote more attention to the appliance customer and highlight some of the significant advances in technology in this category."
The stores are expected to be up and running before the holiday season.
McCollough said the company will also remodel 30 to 35 full-line stores in Richmond and Florida's Miami, West Palm Beach, Tampa, Ft. Myers and Orlando markets by converting as much as 30% of non-selling square footage to sales space.
Circuit will devote its newfound footage to previously announced in-store shops selling AOL services, Sony Memory Stick products and digital audio devices. The space will also be used in part for redesigned wireless phone displays, enhanced DVD, DirecTV and other digital set-top areas, and expanded DTV displays.
The remodeled stores will also feature "significantly expanded" self-service areas, and a deeper assortment of video games and other entertainment software. The company also plans to add 35mm cameras to the stores' mix.
The remodeling project is expected to be completed by mid-fall.
In other Circuit news, the company said sales at its consumer electronics/appliance outlets for fiscal year 2000, ended February 29, were up 10% to $10.6 billion, while comparable store sales grew 8%. Fourth-quarter revenue rose 15% to $3.48 billion, assisted by a 20% spike in February sales of $923.8 million. Same-store sales were ahead 10% for the quarter and 18% for the month.
Circuit chairman Richard Sharp said February's comp-store gains "greatly exceeded our expectations." Personal computers led the charge, although Sharp also cited a "significant increase" in the pace of consumer electronics sales last month. Also goosing the results was the extra day in February, which added about 3 percentage points to the same-store tally.
Circuit's sales mix remained essentially static for the year. TVs represented 18% of annual sales, and VCRs and camcorders accounted for 13% of total revenue, both unchanged from fiscal year 1999. Audio, at 15%, and white goods, at 14%, both slipped a percentage point from the prior year's merchandise mix, while the largest category, home office, edged up two percentage points to 29% of sales.
Regarding profitability, Sharp said the last quarter's "strong sales trends" will likely yield earnings for the retail-store operation of $161.6 million for the period. That would close to double last year's earnings of $87 million, which were impacted by the unit's discontinued Divx DVD business and interest in the CarMax auto retailing affiliate. For the full year, Circuit expects to report a net of $327.2 million, compared to fiscal 1999 earnings of $148.4 million, which also factored in losses from Divx and CarMax. The company plans to release its fiscal 2000 earnings early next month.