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Circuit City to scale back store openings in fiscal year
(Richmond Times-Dispatch (VA) Via Acquire Media NewsEdge) Oct. 5--Circuit City Stores Inc. said yesterday that it will cut back on the number of stores it will open by the end of this fiscal year after saying on Monday that it would honor all commitments through the end of the fiscal year in February.
In e-mails Friday evening and yesterday morning, Circuit City spokesman Bill Cimino confirmed that the chain would not be moving forward on some of its new stores slated to open by February 2009.
"The management team and the board of directors are conducting a comprehensive review of all aspects of our business to determine the best methods of delivering substantially improved financial performance and maximizing shareholder value," Cimino said. "As part of this review, we have been assessing the productivity of our asset base and, in line with this, we have put on hold the opening of some stores."
In a follow-up e-mail yesterday, he wrote, "Some of the ones on hold are this year and some are next." He did not give the exact number of stores that would be affected.
The Henrico County-based consumer-electronics retailer, in its annual report filed this year with the Securities and Exchange Commission, said it would open between 45 and 55 stores this fiscal year, which ends Feb. 28. That includes relocating up to eight stores.
In its second-quarter earnings report, Circuit City reported it had opened 29 stores so far this year. It expected to open an additional 26 through early next year.
In a conference call with investors Monday, management at the beleaguered retailer reported that, "other than existing commitments, management intends to suspend store openings beginning with fiscal 2010 in order to focus on improving the execution of the company's business."
The move comes as Circuit City tries to turn itself around after nearly two years of losses and two tumultuous weeks. During the past two weeks, Circuit City has seen its president and chief executive leave and its stock plummet to 57 cents from a 52-week high of $9.65
On Monday, it reported that for the second quarter, which ended Aug. 31, it lost $239.2 million, or $1.45 per share. That compares with a net loss of $62.8 million, or 38 cents, during the same period last year.
Contact Louis Llovio at (804) 649-6348 or LLLovio@timesdispatch.com.
To see more of the Richmond Times-Dispatch, or to subscribe to the newspaper, go to http://www.timesdispatch.com.
Copyright (c) 2008, Richmond Times-Dispatch, Va.
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