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Circuit City to Close Some Stores

Circuit City Stores Inc. said today it plans to close seven non-performing stores in the U.S. along with a distribution center in Kentucky and 62 Canadian stores in a move to improve profitability. Circuit City officials have not yet provided the locations of the stores that will be shuttered. The retailer operates eight units in the greater San Fernando Valley area. “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,” said Philip J. Schoonover, chairman, president and CEO of the retail chain in statement announcing the changes. The stores are expected to close by the end of February. Together, they generated $71 million in revenue during the twelve months ended Dec. 31, 2006. “These stores either are cash flow negative or are very low-volume, low-cash flow stores with older formats that are being closed for brand image reasons,” the company said.

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