Online Article Page


Circuit City to Close 155 Stores, Layoffs Imminent
source: AP

The company has had only one profitable quarter in the past year, posting a wider second-quarter loss in September with a 13 percent decline in sales at stores open at least a year. Its results have weakened as the company faces significant declines in traffic, heightened competition from rival Best Buy Co. and others and a weakened brand position.

Circuit City, which is exploring strategic alternatives, has also been working with advisers to determine how to substantially improve its operating and financial performance.

The company said last week it received a warning from the New York Stock Exchange that its stock price is not high enough for continued listing. The NYSE said the shares had an average closing price of less than $1 over 30 consecutive trading days as of Oct. 22, falling short of the exchange's requirement. Its shares have closed under a dollar since Sept. 30, when they fell to 76 cents. Shares have traded between 17 cents and $8.24 in the last year.

In order to regain compliance with the NYSE, Circuit City's common stock share price and the average share price over a consecutive 30-trading-day period must both exceed $1 within six months of it receiving the notice.

A major Circuit City shareholder - Classic Fund Management AG, a Liechtenstein-based asset management company - also said last week that it cut its holdings to 8.2 million shares, or about 4.8 percent of the company, from 9.5 million shares, or 5.6 percent.

Circuit City has been under new leadership since late September when Chief Executive Philip J. Schoonover agreed to step down. He was replaced by Marcum.