Circuit City’s Week of Turmoil
By George Anderson
The week began for Circuit City with the announcement that a shareholder, Highfields Capital Management, had made an offer to buy the company with the intention of taking it private.
In a letter to the company, the Boston-based firm expressed its unhappiness with Circuit City management’s ability to get the company turned around.
Yesterday, Circuit City announced it was closing 19 stores, five regional offices and a distribution center at the end of the month in an attempt to improve operating performance.
Circuit City’s chief executive officer, W. Alan McCollough, said that a company analysis made it clear that “it no longer makes financial sense to keep some of the stores in those markets open.”
According to an Associated Press report, the 19 locations generated $170 million in sales last year.
Moderator’s Comment: Will taking Circuit City private improve its chances of getting its business turned around? What needs fixing at the consumer electronics
Further awful news for Circuit City was a plane crash of a company jet in Colorado yesterday. All eight people on board lost their lives. Our sympathies
go out to all those who lost loved ones and/or valued co-workers in this accident. –
George Anderson – Moderator
- Group of investors offers $3.25 billion for Circuit City – USA
- Circuit City says it will close 19 superstores – The
Associated Press/USA Today