Circuit City In Fight For Life

Circuit City announced this morning they will be closing 155 stores nationwide in an attempt to keep alive admist a devastating downturn in the world economy. Although the announcement comes as no surprise, this does worry analysts that the retail electronics industry may see more of these announcements.

The large electronics retailer lost $162.7 million in the 2nd quarter this year prompting it to take drastic cuts to stay alive. According to ARS Technica, “Circuit City claimed that its store closings (PDF) and lost business are partially the result of the weak retail market, which impacted both the company’s revenue and gross product margins ‘to a greater degree than management had anticipated previously.’ Total retail sales across the market did take a hit in the third quarter, putting more pressure on the company, but Circuit City’s dubious financial statements piled on the hurt.”

At least 10 stores that were slated to open by 2010 have also been canceled in attempts to stop the bleeding. Many analysts believe these attempts are futile, though, and we will see the overall effect in the first quarter of 2009.