Circuit City is shuttering 155 stores, another retail hit for the recording industry. The move comes alongside softening consumer confidence and tightening credit, among other pressures. It also comes ahead of the holiday shopping period, and potentially avoids a bankruptcy during those critical months.
The move is designed to decrease overhead for the US-based consumer electronics retail giant, and pave the way for a successful restructuring plan. "The company plans to operate its business without interruption while it engages in discussions with its lenders and works with advisors to determine the most appropriate restructuring alternatives," the company stated on Monday.
As a result of the closures, Circuit City will shrink its footprint to 566 stores and exit 12 markets. During the liquidation process, that means serious bargains for cash-strapped buyers, though the benefits end there. Circuit City also sells physical media like DVDs and CDs, and the closures further decrease the number of impulse opportunities. It also shifts more of the action towards Wal-Mart and Best Buy, both of whom are gaining a disproportionate share of physical sales and a growing level of influence over CD pricing.
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