Circuit City Stores Inc. (Richmond, Va.) will close 19 of its Superstores by the end of the month.
“An analysis of markets across the country has identified 19 [locations] where the trade area can no longer support a Circuit City Superstore, leaving the locations with no reasonable expectation of positive cash flow in the near future,” said chairman, president and ceo W. Alan McCollough. “The analysis also shows that near-term relocation opportunities do not exist for these stores. The move will enable management to better focus attention on improving the performance of the other 600 stores.”
In the fourth quarter of its current fiscal year, Circuit City expects to incur expenses of approximately $35 million after tax in conjunction with the store closings, from costs relate primarily to lease terminations, fixed asset disposals and to a lesser extent, severance and other costs. The 19 stores combined had revenues of $151 million for the 12-month period ended December 31, 2003.
In addition to the store closings, the company's fiscal 2004 real estate plan includes 18 Superstore relocations, eight new Superstores in incremental trade areas and four fully remodeled Superstores. This plan will be completed with the store closings and seven Superstore relocations planned for February. Since the beginning of fiscal 2001 through Feb. 29, 2004, 131 stores (or 22 percent of the company's store base) will have been relocated, newly constructed or fully remodeled.
The consumer electronics retailer reiterated its expectation to open 65 to 70 Superstores in the upcoming fiscal year, “depending on real estate availability.” Slightly more than half of these stores will be relocations. The company expects that at the end of fiscal 2005 approximately 30 percent of its store base will have been relocated, newly constructed or fully remodeled since the beginning of fiscal 2001.
The 19 closings are in Brookdale, Brooklyn Center, Minn.; Cape Girardeau, Mo.; Cutler Ridge, Fla.; Memorial Drive, Decatur, Ga.; Delray Beach, Fla.; Fairlawn, Ohio; Federal Way, Wash.; Fort Smith, Ark.; Greenspoint, E. Houston, Texas; Washington Street, Indianapolis; Kokomo, Ind.; Westwood Village, Los Angeles; Martinsville, Va.; Golf Mill Mall, Niles, Ill.; Northbrook, Ill.; Odessa, Texas; S. 72nd St.; Omaha, Neb.; S.W. Wanamaker Road, Topeka, Kan.; and Trotwood, Ohio.