Major electronics chain Circuit City has just announced their plan to close 155 of their stores and lay off what is rumored to be up to 7,000 employees in response to poor performance against other electronic superstores. This will cut 20 percent of Circuit City’s operations.
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Major electronics chain Circuit City has just announced their plan to close 155 of their stores and lay off what is rumored to be up to 7,000 employees in response to poor performance against other electronic superstores. This will cut 20 percent of Circuit City’s operations.
Since late September, unprecedented events have occurred in the financial and consumer markets causing macroeconomic trends to worsen sharply,” Circuit City chief executive James Marcum explained. “The combination of these trends has strained severely our working capital and liquidity, and so we are making a number of difficult, but necessary, decisions to address the company’s financial situation as quickly as possible.”
In addition to low sales numbers, factors of Circuit City’s decline include issues with the credit market, tax collectors, and consumers who have moved on to greener pastures (such as electronics leader Best Buy).
A press release from Circuit City details not only the problems faced by the company but also plans to breathe life into their dying operation. Such potential solutions include renegotiating leases and reducing the opening of new stores.
The cuts will eliminate $1.4 billion in revenue. A list of the stores closing can be found here http://investor.circuitcity.com.
