Circuit City Stores, Inc. will be closing 155 stores nationwide and withdrawing from 12 U.S media markets.
“We deeply regret the impact that this announcement will have on our associates, our guests and the communities where these stores are located,” said James Marcum, vice chairman, acting president, and chief executive officer of Circuit City Inc., in a press release.
Jim Babb, spokesman for the company, said the company is facing many challenges due to the current weak economy and has decided to take immediate reconstructive actions.
Babb said only stores that are underperforming and are no longer a strategic fit for the company will close.
“When results were viewed at the store level, the closing stores as compared to the stores remaining open, on average had lower sales, a lower close rate and a lower gross profit margin rate,” Babb said.
Marcum further explained the issue in a recent press release from the company
“Since late September, unprecedented events have occurred in the financial and consumer markets causing macroeconomic trends to worsen sharply”, Marcum said. “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.”
Babb said approximately 17 percent of the company workforce nationwide will be reduced. He said local and regional headcounts are disclosed to the public.
“The company is making a number of difficult, but necessary decisions to address our financial situation as quickly as possible,” Marcum said.
Babb also said that new store openings will be reduced and the renegotiating of certain leases will be approached aggressively and the company is considering all possible and available alternatives to the problem.
Florida A&M University students who shop at Circuit City see the news as unimportant.
“It’s almost insignificant,” said Brian Smith, 18, a freshman engineer student. “Its like McDonalds and Whataburger”.
Smith said more people in Tallahassee frequent Best Buy rather than Circuit City anyway.
Deejay Young, 18, a freshman English student, agrees.
“Circuit City has cheaper stuff, but Best Buy has better quality,” Young said.
Stores in Tallahassee and Panama City as well as cities in Alabama, Georgia, Texas, Virginia, Indiana, Ohio and Kentucky are closing. Multi-store markets are also closing in Kansas City, Kan. and Phoenix, Ariz.
Babb said after the closings, the company will continue to operate the remaining 566 stores nationwide in the 153 U.S. media markets and no Canadian stores are set to close.
The managers and workers of Circuit City in Tallahassee on Apalachee Parkway were not authorized to express their feelings or answer any questions on the subject.
“As long as the FAMU students are still in the program, then I’m good,” Adjei said.
James Barge, a computer-engineering student from Jacksonville thinks otherwise.
“They started together and should stick together,” Barge said. ” I don’t understand the benefit of splitting up.”
Ammons was not available to comment, and at this time, there are no dates for when the process will begin.