Circuit City to close 69 stores (7 in U.S., 62 in Canada)
#1
DVD Talk Limited Edition
Thread Starter
Circuit City to close 69 stores (7 in U.S., 62 in Canada)
http://www.boston.com/business/artic...stores_center/
I'll be curious to see what inventory is remaining when the stores reopen for the clearance sale on Wednesday. I imagine iPods and video game systems will have mysteriously sold out by then.
RICHMOND, Va. -- Circuit City Stores Inc., the nation's No. 2 consumer electronics retailer, said Thursday it plans to close seven domestic Superstores, a Kentucky distribution center and 62 company-owned stores in Canada to cut costs and improve its financial performance.
The closings will take place over the next six months at an expected total cost of $85 million to $105 million, all to be incurred in the current fourth fiscal quarter, which ends Feb. 28, Circuit City said.
"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," chief executive Philip J. Schoonover said in a statement.
Shares of Circuit City rose $1.07, or 5.19 percent, to close at $21.67 on the New York Stock Exchange.
Circuit City would not identify the stores to be closed because company officials were in the process of notifying employees. The stores will be closed Monday, then reopen Wednesday for clearance sales, spokesman Bill Cimino said.
The company could not immediately determine the exact number of employees who would lose their jobs. The distribution center employs 12 people, and each of the seven Superstores slated for closing employs about 30 full-time and part-time workers, Cimino said.
Circuit City operates through 643 Superstores and 12 other locations in 158 U.S. markets. The international segment has more than 800 retail stores and dealer outlets in Canada. The company also sells it products online.
The retailer, second behind Best Buy Inc., also is realigning its management structure. It named a new merchandising officer, David L. Mathews, who replaces Douglas T. Moore, executive vice president and chief merchandising officer. Mathews will be head of merchandising, marketing, services and supply chains. George D. Clark Jr. will lead Circuit City's retail channels.
The seven domestic Superstores slated to close by the end of February generated $71 million in revenue in 2006. Separately, one Superstore will be closed this month in advance of opening a replacement store in the first fiscal quarter of 2008.
Circuit City's distribution center in Louisville was used primarily for store fixtures and signage. A separate distribution facility there primarily used to distribute entertainment software will remain open.
Circuit City's international segment plans to close approximately 62 underperforming company-owned stores in Canada. Each of the stores employed between two to 15 people, Cimino said. The company previously announced that it would return 92 Rogers Plus stores to Rogers Wireless Inc. The combined plans would result in the layoffs of 70 workers in the store support center and in field management, Circuit City said. The international segment also expects to incur costs related to plans to exit product lines and otherwise match up its merchandise with consumer demand.
The company also said it will shut down its Rapid Satellite business, which was being offered for sale. Circuit City purchased the small satellite-television retailer in 2005.
Raymond James & Associates analyst Dan Wewer endorsed Circuit City's restructuring effort.
"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," Wewer said in a research brief. "Frankly, we had anticipated Circuit City would look to close all of its Canadian businesses given their poor performance."
Circuit City has long struggled for market share against Richfield, Minn.-based Best Buy, and analysts have said each of Best Buy's locations bring in about twice as much revenue as its smaller rival. Both have seen fierce competition from Wal-Mart Stores Inc., which lowered prices for key products such as flat-panel televisions this past holiday shopping season, forcing Circuit City and Best Buy to follow suit and cutting into their third-quarter results.
Circuit City lost $16 million in the third quarter; Best Buy's third-quarter profit rose nearly 9 percent to $150 million. Circuit City will report its fourth-quarter results in early April, Cimino said.
The closings will take place over the next six months at an expected total cost of $85 million to $105 million, all to be incurred in the current fourth fiscal quarter, which ends Feb. 28, Circuit City said.
"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," chief executive Philip J. Schoonover said in a statement.
Shares of Circuit City rose $1.07, or 5.19 percent, to close at $21.67 on the New York Stock Exchange.
Circuit City would not identify the stores to be closed because company officials were in the process of notifying employees. The stores will be closed Monday, then reopen Wednesday for clearance sales, spokesman Bill Cimino said.
The company could not immediately determine the exact number of employees who would lose their jobs. The distribution center employs 12 people, and each of the seven Superstores slated for closing employs about 30 full-time and part-time workers, Cimino said.
Circuit City operates through 643 Superstores and 12 other locations in 158 U.S. markets. The international segment has more than 800 retail stores and dealer outlets in Canada. The company also sells it products online.
The retailer, second behind Best Buy Inc., also is realigning its management structure. It named a new merchandising officer, David L. Mathews, who replaces Douglas T. Moore, executive vice president and chief merchandising officer. Mathews will be head of merchandising, marketing, services and supply chains. George D. Clark Jr. will lead Circuit City's retail channels.
The seven domestic Superstores slated to close by the end of February generated $71 million in revenue in 2006. Separately, one Superstore will be closed this month in advance of opening a replacement store in the first fiscal quarter of 2008.
Circuit City's distribution center in Louisville was used primarily for store fixtures and signage. A separate distribution facility there primarily used to distribute entertainment software will remain open.
Circuit City's international segment plans to close approximately 62 underperforming company-owned stores in Canada. Each of the stores employed between two to 15 people, Cimino said. The company previously announced that it would return 92 Rogers Plus stores to Rogers Wireless Inc. The combined plans would result in the layoffs of 70 workers in the store support center and in field management, Circuit City said. The international segment also expects to incur costs related to plans to exit product lines and otherwise match up its merchandise with consumer demand.
The company also said it will shut down its Rapid Satellite business, which was being offered for sale. Circuit City purchased the small satellite-television retailer in 2005.
Raymond James & Associates analyst Dan Wewer endorsed Circuit City's restructuring effort.
"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," Wewer said in a research brief. "Frankly, we had anticipated Circuit City would look to close all of its Canadian businesses given their poor performance."
Circuit City has long struggled for market share against Richfield, Minn.-based Best Buy, and analysts have said each of Best Buy's locations bring in about twice as much revenue as its smaller rival. Both have seen fierce competition from Wal-Mart Stores Inc., which lowered prices for key products such as flat-panel televisions this past holiday shopping season, forcing Circuit City and Best Buy to follow suit and cutting into their third-quarter results.
Circuit City lost $16 million in the third quarter; Best Buy's third-quarter profit rose nearly 9 percent to $150 million. Circuit City will report its fourth-quarter results in early April, Cimino said.
#2
DVD Talk Special Edition
I was a bit surprised that it looked they were building a new Circuit City by where I live. The funny thing is it is only a few miles away from one they had shut down during the last bunch of closings.
#4
DVD Talk Hall of Fame
Originally Posted by Big Dave
I was a bit surprised that it looked they were building a new Circuit City by where I live. The funny thing is it is only a few miles away from one they had shut down during the last bunch of closings.
Gotta love the government thought process.
#5
DVD Talk Special Edition
Join Date: May 2006
Posts: 1,445
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by TheMadMonk
I hope someone posts a list of the stores that are closing, whenever that info is available, so I know if I should make a trip out on Wednesday.
That's when they did away with the appliances. The store is just as small, carries maybe 1/3 or less of the DVDs Best Buy carries, and all of their stock is less than Best Buys' stores. BB stores upset me at times, but at least when you go in the store has an exciting atmosphere and is huge and carry a ton of stuff.
From what I've seen over the last 15 years is Circuit City refused to expand and be innovated and simply watched Best Buy punch em in the neck and laugh all the way to the bank.
#6
DVD Talk Special Edition
I am surpised that CC has not come out with a rival rewards program to go against Best Buy. I know a lot of people simply price-match (the often better) price at CC at Best Buy becuase of that.
#7
DVD Talk Hero
I often get the impression that Circuit City is going to be leaving us before too long.
The stores just suck. The DVDs are a pain the ass to browse through, and they have huge inventory problems.
The shit they advertise as being on sale is never in stock; they'll do a sale for $5.99 DVDs or something and they're relegated into these two little bins that are about eighteen inches square, and there's nothing in them but copies of Pearl Harbor and a sign that says NO RAINCHECKS.
And they're always out of stock on new releases. Every time I go in there, the new release shelves are empty except for a three copies of the week's shittiest releases.
CDs fare a little better, but their selection is tinier than Best Buy's by a pretty wide margin. (I'd estimate that they have about one-fifth of the amount of CDs BB carries.)
And the video game section is pathetic. Very little hardware is kept in stock, and the selection of games looks like it's a year old.
As such, I seldom go in there any more. If I see they have a good price on something I just pricematch it at Wal-Mart or Best Buy.
And what's up with not having check-outs? Why do I have to walk up to the customer service desk to buy a CD? The first time I went into one of their stores I wandered around for about fifteen minutes trying to figure out how to pay.
The stores just suck. The DVDs are a pain the ass to browse through, and they have huge inventory problems.
The shit they advertise as being on sale is never in stock; they'll do a sale for $5.99 DVDs or something and they're relegated into these two little bins that are about eighteen inches square, and there's nothing in them but copies of Pearl Harbor and a sign that says NO RAINCHECKS.
And they're always out of stock on new releases. Every time I go in there, the new release shelves are empty except for a three copies of the week's shittiest releases.
CDs fare a little better, but their selection is tinier than Best Buy's by a pretty wide margin. (I'd estimate that they have about one-fifth of the amount of CDs BB carries.)
And the video game section is pathetic. Very little hardware is kept in stock, and the selection of games looks like it's a year old.
As such, I seldom go in there any more. If I see they have a good price on something I just pricematch it at Wal-Mart or Best Buy.
And what's up with not having check-outs? Why do I have to walk up to the customer service desk to buy a CD? The first time I went into one of their stores I wandered around for about fifteen minutes trying to figure out how to pay.
#8
Senior Member
Originally Posted by Josh-da-man
The stores just suck.
#9
DVD Talk Special Edition
Join Date: May 2006
Location: Twin Cities, MN.
Posts: 1,227
Likes: 0
Received 0 Likes
on
0 Posts
Not surprised. Financial performance aside, they suck. It took four months to get three separate rebates on my new laptop. Multiple phone calls and mailing of receipts. Additionally, my CC is across the interstate from a BB. How can they expect to sell against them that way?
#10
DVD Talk Gold Edition
Originally Posted by Big Dave
I am surpised that CC has not come out with a rival rewards program to go against Best Buy. I know a lot of people simply price-match (the often better) price at CC at Best Buy becuase of that.
#12
DVD Talk Limited Edition
CC really does suck now, or at least the stores by me. There's a Best Buy less than a minute down the road from the one closest to me.
The new releases are locked up in a case. When you want one, you then have to wander around the store to find someone to unlock the case. THEN you have to find someone to ring you up.
The new releases are locked up in a case. When you want one, you then have to wander around the store to find someone to unlock the case. THEN you have to find someone to ring you up.
#13
DVD Talk Limited Edition
The one near me has a terrible DVD & CD organization system that simply is nowhere near as good as what Best Buy uses.
I'd actually shop for movies there more often if things were easier to find.
I'd actually shop for movies there more often if things were easier to find.
#14
DVD Talk Gold Edition
Join Date: Oct 2000
Location: Pittsburgh, PA, USA
Posts: 2,456
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Josh-da-man
And what's up with not having check-outs? Why do I have to walk up to the customer service desk to buy a CD? The first time I went into one of their stores I wandered around for about fifteen minutes trying to figure out how to pay.
#16
DVD Talk Reviewer & TOAT Winner
Weren't all new movies supposed to be available only on DIVX by now?
#17
DVD Talk Special Edition
The store here is always disorganized, but they have plenty of sale items in stock.
The city has been talking about moving the store a block or so away from its current location because the store needs an overhaul and the plaza was recently purchased by a development company.
But plans on updating the store have been up in the air for at least three years.
I doubt they'll close my local store. There is no Best Buy or Fry's for 35 miles. CompUSA is 10 miles away.
The city has been talking about moving the store a block or so away from its current location because the store needs an overhaul and the plaza was recently purchased by a development company.
But plans on updating the store have been up in the air for at least three years.
I doubt they'll close my local store. There is no Best Buy or Fry's for 35 miles. CompUSA is 10 miles away.
#20
New Member
Join Date: Feb 2007
Posts: 2
Likes: 0
Received 0 Likes
on
0 Posts
They closed the store by me here in Cincinnati, Ohio (Eastgate)
I worked there for 3 years, feel terrible that all my friends were pretty much told, "Thanks for your hard work over the years, now kindly, get the hell out"
They became more about the money and less about the customer service, they have very few people on hand to help with customers...granted the best buy down the road is the same way.
I worked there for 3 years, feel terrible that all my friends were pretty much told, "Thanks for your hard work over the years, now kindly, get the hell out"
They became more about the money and less about the customer service, they have very few people on hand to help with customers...granted the best buy down the road is the same way.
Last edited by JD316632; 02-12-07 at 10:52 AM.
#23
DVD Talk Limited Edition
Join Date: Oct 2005
Location: Muncie, IN [Member formerly known as abrg923]
Posts: 6,341
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by larry47591
I have to think the Muncie, IN Store is closing, because if I check stock on anything at CircuitCity.com Everything sends me to carmel.
This sucks. Now I'm limited to either Best Buy or Wal-Mart for my weekly DVDs, and neither has the low prices that CC has.
#24
DVD Talk Special Edition
Join Date: Apr 2003
Posts: 1,608
Likes: 0
Received 0 Likes
on
0 Posts
The Circuit City that is closest to my house sucks. They never have the CD or DVD that i go in there to buy. I wanted to check out DVD players one time and there wasn't anybody around to help me so I walked out. You have to go to customer service to pay and hope somebody is standing there waiting to help you. I don't see how that store stays in business, it is ALWAYS empty. I stopped going there like a year and a half ago.
#25
Senior Member
Join Date: May 1999
Location: FL
Posts: 472
Likes: 0
Received 0 Likes
on
0 Posts
Here's the list of store closings from the CC investor relations website.
Store Closing List
Store Name Address City, State
Bloomington 2520 East 3rd St. Bloomington, Ind.
West 38th Street 3670 Moller Road Indianapolis, Ind.
Evergreen Plaza 9600 S Western Ave. Evergreen Park, Ill.
Randhurst 999 North Elmhurst Road Mount Prospect, Ill.
Old Orchard 4831 Golf Road Skokie, Ill.
Wichita East 8405 E. Kellogg Drive Wichita, Kan.
Pontiac 550 N. Telegraph Road Detroit, Mich.
Lansing East 2655 E Grand River Ave. East Lansing, Mich.
Southfield 28556 Telegraph Road Southfield, Mich.
Traverse City 3123 South Airport Road Traverse City, Mich.
Westland 4030 West Broad St. Columbus, Ohio
Olmsted 27250 Lorain Road North Olmsted, Ohio
North Randall 21639 Miles Road North Randall, Ohio
Parmatown 8009 Day Drive Parma, Ohio
Jackson 1938 Emporium Drive Jackson, Tenn.
Katy Freeway 1045 Katy Freeway Houston, Texas
Lufkin 4600 S Medford Drive Lufkin, Texas
Lynchburg 3700 Candlers Mountain Road Lynchburg, Va.
Northridge 8173 West Brown Deer Road Milwaukee, Wis.
Phil
Store Closing List
Store Name Address City, State
Bloomington 2520 East 3rd St. Bloomington, Ind.
West 38th Street 3670 Moller Road Indianapolis, Ind.
Evergreen Plaza 9600 S Western Ave. Evergreen Park, Ill.
Randhurst 999 North Elmhurst Road Mount Prospect, Ill.
Old Orchard 4831 Golf Road Skokie, Ill.
Wichita East 8405 E. Kellogg Drive Wichita, Kan.
Pontiac 550 N. Telegraph Road Detroit, Mich.
Lansing East 2655 E Grand River Ave. East Lansing, Mich.
Southfield 28556 Telegraph Road Southfield, Mich.
Traverse City 3123 South Airport Road Traverse City, Mich.
Westland 4030 West Broad St. Columbus, Ohio
Olmsted 27250 Lorain Road North Olmsted, Ohio
North Randall 21639 Miles Road North Randall, Ohio
Parmatown 8009 Day Drive Parma, Ohio
Jackson 1938 Emporium Drive Jackson, Tenn.
Katy Freeway 1045 Katy Freeway Houston, Texas
Lufkin 4600 S Medford Drive Lufkin, Texas
Lynchburg 3700 Candlers Mountain Road Lynchburg, Va.
Northridge 8173 West Brown Deer Road Milwaukee, Wis.
Phil