By David Ponce
The economy sucks, and everyone is tightening their belts. By now, you might have heard the news: Circuit City will be closing 155 of its retail locations, in 55 markets nationwide. This represents a 17 percent workforce reduction. From the announcement:
Due in part to its deteriorating liquidity position and the continued weak macroeconomic environment, the company has decided to take certain restructuring actions immediately, including closing 155 domestic segment stores, reducing future store openings and aggressively renegotiating certain leases. The company also is considering all available options and alternatives to restructure its business.
They’re serious about getting this done right quick, with affected stores not opening for business tomorrow and actual closings beginning on November 5th, two days from now.
Despite representing $1.4 billion in net sales, the stores affected by the closings “on average had lower net sales, a lower close rate and a lower gross profit margin rate. The stores, on average, were also unprofitable when marketing expenses were allocated to the individual store-level results.” That’s pretty much why they’re getting axed.
It’s a sad day, really, and here’s hoping you aren’t directly affected by this.