Circuit City closing Cape store on Feb. 23

19 closings nationwide

By Jim Obert

Business Today

The Circuit City Superstore, which opened November 1999 at 164 Siemers Drive in Cape Girardeau, will close Feb. 23. The closing affects 20 full-time and 24 part-time workers.

Circuit City Stores Inc., based in Richmond, Va., says it will close 19 Superstores by the end of the month in order to improve the company's overall financial performance. There will be a loss of 360 full-time and 500 part-time jobs, company officials said.

The Cape Girardeau store, in Cape West Business Park, is the only one in Missouri being closed. Other closings are in Illinois, Texas, Indiana, California, Florida and eight other states.

According to W. Alan McCollough, chairman, president and chief executive officer of Circuit City Stores Inc., an analysis of markets across the country identified 19 Circuit City Superstores where the trade area can no longer support them.

"The analysis also shows that near-term relocation opportunities do not exist for these stores," said McCollough. "The move will enable management to better focus attention on improving the performance of the other 600 stores."

The closing stores were not open Monday, Feb. 9, but reopened at noon Tuesday, Feb. 10, for a close-out sale of display merchandise until Feb. 23, according to Steve Mullen, Circuit City spokesman.

Circuit City is the nation's No. 2 specialty retailer of consumer electronics. The nation's No. 1 retailer is Best Buy, which opened a store in Cape Girardeau in September 2002.

In the past three years, Circuit City has seen its business muffled by larger rival Best Buy Co. Inc. , whose push to locate many of its more than 600 outlets at premium sites such as just off highways is helping it attract more customers, analysts say.

In the most recent key selling month of December, Circuit City saw its sales at stores open at least a year drop 2 percent, while Best Buy posted a 9.3 percent jump in sales from stores open at least 14 months.

In the fourth quarter of the current fiscal year, Circuit City expects to incur expenses of approximately $35 million after tax in conjunction with the store closings, according to McCollough. The costs relate primarily to lease terminations, fixed asset disposals, and to a lesser extent severance and other costs. The 19 stores combined had revenues of $151 million for the 12-month period ended Dec. 31, 2003.

In addition to the store closings, the company's fiscal 2004 real estate plan includes 18 Superstore relocations, eight new Superstores in incremental trade areas and four fully remodeled Superstores. This plan will be completed with the store closings and seven Superstore relocations planned for February.

Since the beginning of fiscal 2001 through Feb. 29, 2004, 131 stores, or 22 percent of the company's store base, will have been relocated, newly constructed or fully remodeled, said McCollough.

Circuit City expects to open 65 to 70 Superstores in the upcoming fiscal year, depending on real estate availability. Slightly more than half of these stores will be relocations. The company expects that at the end of fiscal 2005 approximately 30 percent of its store base will have been relocated, newly constructed or fully remodeled since the beginning of fiscal 2001.

At the end of February 2004, Circuit City expects to operate 600 Circuit City Superstores and five mall-based stores in 157 markets.