Circuit City to close 150 stores?

By on October 20, 2008, 2:10 PM
Circuit City is weighing its options in order to avoid filing for bankruptcy. According to a report in The Wall Street Journal, citing the ever-ubiquitous “people familiar with the matter,” one such option would be to shut down at least 150 of its locations and cut thousands of jobs.

The move would reportedly free up $350 million from inventory that could be used to pay off some of the company's debt. If the retailer does announce store closings, you can almost certainly count on fire sale prices as part of that $350 million liquidation – but consumers will probably be hesitant to buy big-ticket flat screens, computers, and other items if they think Circuit City won’t be there to take returns and honor warranties.

It would be a shame to see Circuit City disappear, but perhaps their own management is to blame given their history of refusing buyout offers – the company turned down an $8 a share offer in 2003 and $17 per share in 2005 from Highfields Capital Management, and recently blew a shot at being acquired by Blockbuster for “at least” $6 a share.

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