CRAINS DETROIT BUSINESS (NANCY KAFFER) - Circuit City Stores Inc. will close seven stores in Michigan, five in the Detroit market, the company announced Monday.
The Richmond, Va.-based consumer electronics giant has had several quarters of flagging profits, saying last week that its stock had fallen below the New York Stock Exchange’s listing criteria. Share price had dropped below $1 for 30 consecutive days of trading.
Circuit City, the nation’s No. 2 retailer of consumer electronics, will close stores in Auburn Hills, Bloomfield Township, Dearborn, Pontiac and Rochester Hills.
“Circuit City is having problems and Michigan is a particularly challenging market,” said Ken Nisch, chairman of Southfield-based retail consultancy JGA Inc.
“People usually don’t close stores in markets just because it is challenging, it’s that they don’t see growth opportunities ... they look at the present but they look at the future, so this is more of a concerning sign about the long-term prospects of those markets.”
Circuit City is closing 155 stores nationwide, about 20 percent of its stores, The Associated Press reported, by Dec. 31. Closing stores are expected not to open Tuesday; store-closing sales are expected to begin Wednesday, according to the report.
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