Circuit City won’t speculate on closure reports, but is reviewing practices
Tampa Bay Business Journal - by Robert Yaniz Jr. Editorial assistant
Electronics retailer Circuit City may close 150 stores and snuff thousands of jobs in an attempt to avoid filing for bankruptcy. The company has hired international law firm Skadden, Arps, Slate, Meagher & Flom LLP to oversee its bankruptcy but has chosen not to pursue Chapter 11 before the holiday season, the Wall Street Journal reported Monday.
Management at all 12 Tampa Bay area locations was unavailable for comment, though one employee who asked their name not be used told the Tampa Bay Business Journal there has been talk internally about potential store closings.
In an official statement, the company said that it is “not going to speculate on rumors and comment” but that it is “conducting a comprehensive review” of its business practices.
In May 2008, the company retained Goldman, Sachs & Co. to assist it in exploring strategic alternatives to enhance shareholder value, a filing with the SEC said. “Management and the board of directors have thus far concluded that, while strategic options will always be explored as part of our fiduciary responsibility, given current market conditions, it is prudent to focus internally on improving our performance in order to operate as a standalone business.”
In its quarterly filing with the SEC Sept. 30, the company posted a Q2 net loss from continuing operations of $239.2 million, or $1.45 a share, for the second quarter of fiscal 2009, compared with a net loss from continuing operations of $63.1 million, or 38 cents a share, in the same period last fiscal year. Net sales declined 9.6 percent to $2.39 billion from $2.64 billion in the same period last fiscal year driven by a comparable store sales decline in the domestic segment.
In the last year, Circuit City (NYSE: CC) shares have lost 95 percent of their value.
The company, based in Richmond, Va., operates 693 stores nationally.
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