Circuit City to Close 19 Stores, Cut 910 Jobs

Clearance sales will start at the stores on Fri. and a 400,000-sq.-ft. warehouse in Doswell, Va., will close Feb. 28, the company said. Circuit’s string of bad luck continued Wed. with the crash in Pueblo, Colo., of a corporate jet registered to the retail chain that claimed the lives of 4 company employees who remained unidentified at our deadline.

Overall, Circuit will cut 910 full- (370) and part- time (540) jobs in closing the 19 stores in 9 states. All the stores were leased locations with an average of 11 years remaining on the agreements, a spokesman said. The stores opened in the 1990s, starting with the Lynchburg, Va., location in 1991, the spokesman said. The outlets range from 19,500-sq.-ft. in Bloomington, Ind., to 45,000- sq.-ft. and 44,000-sq.-ft. in Southfield and Pontiac, Mich., respectively, the spokesman said. In shutting stores, Circuit will exit markets in Traverse City, Mich. and Jackson, Miss., he said. The largest of the closings involves 4 stores in Mich. The shutdown of the warehouse, which supplied Circuit stores in Va. and parts of N.C. and the Mid-Atlantic states, will trim another 63 jobs, the spokesman said. Circuit warehouses in Bethlehem, Pa., and Brandywine, Md., will take over distribution previously handled by the Doswell facility, he said.

While retailers taken private frequently move to restructure operations, Circuit’s decision was unrelated to Highfields Capital Partners’ $17-per-share bid on Tues. Rather it stemmed from an on-going “evaluation of our real estate,” the spokesman said.

In addition to the stores, Circuit will close regional offices in Charlotte, Cincinnati, Dallas, Detroit and Miami that were typically occupied by district and regional managers, the spokesman said. No jobs will be cut and the managers will report to new offices, he said. The chain also sold a 181,120-sq.-ft. building on its Richmond, Va., corporate campus to Perimeter Center LLC. The last of the employees housed in the 11-year-old building transferred to Circuit’s existing hq Jan. 21, the spokesman said. Circuit registered a $1.8 million gain on the sale, the total amount of which wasn’t immediately available. It also eliminated $12.6 million of long-term debt tied to an operating lease agreement from the balance sheet as a result of the sale, it said.

Circuit underwent a similar restructuring a year ago, also shutting 19 stores. After the latest closings, Circuit will operate 612 superstores and 5 mall-based Circuit City Express locations. It also has RadioShack stores in Canada that it gained as a result of buying Intertan last year. -- Mark Seavy --

A corporate jet registered to Circuit City crashed Wed. morning 4 miles east of the airport in Pueblo, Colo., killing all 8 aboard -- 6 passengers, the pilot and the co-pilot. The retailer confirmed 4 of those aboard were Circuit City employees, but said they included no officers of the company. It said it would refrain from further comment until next of kin had been notified. The Denver Post quoted authorities as saying the plane, a Cessna 560 Citation twin-engine jet, was the 2nd of 2 aircraft associated with Circuit that was scheduled to land at the Pueblo airport. The report said there was no apparent cause for the crash but quoted the National Weather Service as saying there was freezing rain in the area and a low cloud ceiling at the time of the accident.