Circuit City; Trimming the Fat

Circuit City is getting lean and mean. Cutting the fat, drastically, so to speak. In perhaps a last ditch effort to stay afloat, the second biggest consumer electronics brick-and-mortar retailer is closing at least 150 stores.  That's huge - about 20% of the 712 stores located in the U.S.

Thousands of employees will lose their jobs because of the closings and, according a story in the Wall Street Journal, they'll liquidate $350 million in consumer electronics inventory.

What's behind the closings?

Of course, the economy.  If you can barely afford your home, you're not about to run out and spend thousands on your home theater. For some reason, Best Buy has been able to insulate themselves against this a little more efficiently.

Oddly enough, stock prices rose after the report was first filed.

Currently, Circuit City has hired the same firm that dealt with Kmart's Chapter 11 situation. If they helped turn Kmart around, hopefully, there is hope for CC. -Leslie Shapiro

The Wall Street Journal