Circuit City To Close 19 Stores By End Of February

Circuit City to Close 19 Stores by End of February
February 17, 2004 -- Richmond, Va. -- Circuit City Stores Inc. announced last week that it will close 19 of its locations by the end of February, continuing its initiatives to improve the company's overall financial performance.

"An analysis of markets across the country has identified 19 Superstores where the trade area can no longer support a Circuit City Superstore, leaving the locations with no reasonable expectation of positive cash flow in the near future," said W. Alan McCollough, chairman, president and chief executive officer of Circuit City Stores Inc. "The analysis also shows that near-term relocation opportunities do not exist for these stores. The decision was difficult to make because of the impact on our associates, but the move will enable management to better focus attention on improving the performance of the other 600 stores."

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. 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 December 31, 2003.

The closing stores, located in Brooklyn Center, Minn., Cape Girardeau, Mo., Cutler Ridge, Fla., Decatur, Ga., Delray Beach, Fla., Fairlawn, Ohio, Federal Way, Wash., Fort Smith, Ark., Houston, Texas, Indianapolis, Ind., Kokomo, Ind., Los Angeles, Calif., Martinsville, Va., Niles, Ill., Northbrook, Ill., Odessa, Texas, Omaha, Neb., Topeka, Kan., and Trotwood, Ohio, will have close-out sales of display merchandise and are expected to close permanently on February 23.

In addition to the store closings, the company's fiscal 2004 real estate plan includes 18 store relocations, eight new stores in incremental trade areas and four fully remodeled stores. This plan will be completed with the store closings and seven store relocations planned for February. Since the beginning of fiscal 2001 through February 29, 2004, 131 stores, or 22 percent of the company's store base, will have been relocated, newly constructed or fully remodeled.

Circuit City reiterated its expectation to open 65 to 70 stores 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.