Circuit City Shutters 155 Stores

Circuit City said it will also cut 17 percent of its domestic workforce as part of the store closings, which will affect stores in 55 U.S. markets and will result in Circuit City leaving 12 markets nationwide. The stores slated for closure will not open on Tuesday, Nov. 4, and will begin closing sales on Wednesday, Nov. 5. The stores will close for good by the end of the year. The list of stores Circuit City is closing is available here.

According to a statement from the Richmond, Va.-based consumer-electronics retail chain, the restructuring actions will be taken immediately to avoid the company slipping into bankruptcy. While the main component of the plan will result in 155 stores closing their doors, Circuit City also plans to reduce future store openings and aggressively renegotiate certain leases. Circuit City said it will not open at least 10 locations that were previously expected. It does expect to open two incremental stores during the remainder of 2009, but management intends to suspend store openings beginning in fiscal 2010.

The company did say, however, that it is also considering all available options and alternatives as part of its restructuring plan. Once the 155 stores close for good, Circuit City will maintain 566 stores in 153 U.S. markets.

Circuit City has been considering its options for weeks, with store closings being chief among those considerations. The fallout comes amid economic and financial turmoil. Circuit City said many of its vendors have renegotiated their terms and some now require Circuit City to pay for inventory before product is shipped to stores.

"Since late September, unprecedented events have occurred in the financial and consumer markets causing macroeconomic trends to worsen sharply," said Circuit City Vice Chairman and acting President and CEO James A. Marcum in a statement. "The weakened environment has resulted in a slowdown of consumer spending, further impacting our business as well as the business of our vendors. 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."