First Starbucks Then Circuit City

Posted by Kris | Tuesday, November 04, 2008 | | 0 comments »

First it was Starbucks announcing that it will close down its store admist economic uncertainities. Now Circuit City is following suit. Both are quite a good barometer of consumer spending. This is a bad omen on how bad the recession will be.

Circuit City Plans to Close 155 Stores

Published: November 3, 2008

RICHMOND, Va. (AP) — The consumer electronics retailer Circuit City said Monday that it was closing about 20 percent of its American stores in an effort to return to profitability.

The company, based in Richmond, Va., said that it would close 155 of its more than 700 stores in 12 markets, including Phoenix and Atlanta, by Dec. 31, laying off about 17 percent of its domestic work force.

Circuit City also said it would further reduce store openings and planned to work with landlords to renegotiate leases, lower rent or terminate agreements.

The move comes as Circuit City heads into a holiday shopping season that could determine its future, amid a slowdown in consumer spending that has even strong retailers worried.