Circuit City Pulling Appliances Out Of 35 Stores; Testing Freestanding Majaps Fo

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Circuit City is converting upwards of 35 Superstores to an electronics-only mix and will open six to eight freestanding majaps stores later this year.

The number two CE and appliance chain will test the new dedicated formats in Central and South Florida and in its hometown of Richmond, Va., where it is expected to build an additional 25 Superstores that will sell only electronics.

The company said that segregating its brown and white goods will allow it to better focus on consumer electronics and personal computers and the new digital technologies that have renewed growth in those sectors. At the same time, stand-alone appliance stores will increase consumer awareness of Circuit City's expansive white goods offering.

Plans call for Circuit to remodel 30 to 35 stores in Richmond and Florida's Miami, West Palm Beach, Tampa, Ft. Myers and Orlando markets by mid-fall by removing majaps and converting as much as 30% of non-selling square footage -- including warehouse and office space -- to sales areas.

The stores will devote the newfound footage to previously announced in-store shops selling AOL services, Sony Memory Stick products and digital audio devices including MP3 players. 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, a deeper assortment of music and movies , and a full selection of video game hardware and software, including Sony PlayStation, Nintendo and Sega. Circuit will also increase the stores' assortments of digital cameras and personal computer software, peripherals and accessories, and plans to introduce 35mm cameras to the product mix.

The company said it will open about 25 Superstores during the next twelve months that incorporate the redesign, with the first slated to debut in Jacksonville, Fla., early this summer.

Explained Circuit president Alan McCollough, "We want to create an informative, energizing and fun environment in which consumers can learn more about and purchase new products and services, while also giving them an easy way to purchase more traditional technologies."

The freestanding appliance 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 within the test markets. The retailer said the stores will carry more than 15 white goods brands, including those currently found in its Superstores plus "some higher-end, specialty brands."

The stores will also feature working kitchens for cooking demonstrations, kids' play areas and technology vignettes, as well as the "major appliance stations" presently found in Circuit stores that allow shoppers to custom-order appliances. The new units are expected to be up and running before the holiday season.

"Customers are looking for a different environment when they are shopping for major appliances," McCollough said. "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."

McCollough said the freestanding format will also "increase consumer awareness of our appliance offering and further strengthen our market-share position." He added that the company is gunning for the "70% of appliance customers [who] purchase appliances as replacements," and another 10% to 15% who purchase new products as they remodel their homes. "These are our target customers, and we want to ensure that they are fully aware of the advantages Circuit City can deliver," he said.

"We're going to make a strong effort to make our appliance stores a wonderful place to shop for our female customers, because that's who shops for appliances," a company spokesman said. He said vendor studies and the retailer's own focus groups and market research paint a picture of white goods shoppers as primarily home-owning mothers between the ages of 30 and 50.

"Even though we're number two in the category, we want to raise our profile because there are a lot of consumers out there who don't know we're in appliances," the spokesman said. He added that Florida was targeted for the test because it encompasses a variety of markets and market sizes that fall under the auspices of a single regional division, and that Richmond is Circuit's corporate home base.

Circuit City earned the number-two slot on TWICE's 1999 Appliance Registry for the third consecutive year; its nearly $1.4-billion 1998 appliance volume - up 15.9% from the previous year's white-goods sales - edged its share up to 11.3% of the 1999 Registry's total.

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