RICHMOND, VA. (AP) -- Circuit City Stores Inc. said Monday it is pulling the plug on about 20 percent of its U.S. stores in an effort to return the nation's No. 2 consumer electronics retailer to profitability.
The Richmond, Va.-based company said it will shutter 155 of its more than 700 stores in 55 markets, including Phoenix and Atlanta, by Dec. 31, laying off about 17 percent of its domestic work force. Circuit City also said it will further reduce new store openings and plans to work with landlords to renegotiate leases, lower rent or terminate agreements.
The company said it expects the stores it is shuttering, which generated about $1.4 billion in net sales in fiscal 2008, will not open on Tuesday and store closing sales will begin on Wednesday.
The move comes as Circuit City heads into a crucial holiday shopping season that could determine its future, amid a slowdown in consumer spending that has even the least vulnerable retailers worried.
"The weakened environment has resulted in a slowdown of consumer spending, further impacting our business as well as the business of our vendors," James A. Marcum, vice chairman and acting president and chief executive officer said in a statement. "The combination of these trends has strained severely our working capital and liquidity."
Marcum called the decision to close stores "difficult, but necessary."
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