Circuit City reveals plans to close 69 stores

Circuit City Stores is the America’s No. 2 consumer electronics retailer. The company has now said that they are planning to close seven domestic Superstores, a Kentucky distribution center and 62 company-owned stores in Canada.

These steps are being taken by the company to cut costs and improve its financial performance.

Circuit City would be closing down these stores in the coming six months. Company chief executive Philip J. Schoonover said in a statement: “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.”

They have not identified the stores to be closed down yet as they are in the process of notifying employees.

Raymond James & Associates analyst Dan Wewer spoke about this new development: “We believe it is critical for all consumer electronics retailers, including Circuit City, to lower their cost structure given ongoing pressures on gross margin rate. Frankly, we had anticipated Circuit City would look to close all of its Canadian businesses given their poor performance.”

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