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Circuit City to close 8 centers, cut 1,000 jobs and remodel stores

SHARE Circuit City to close 8 centers, cut 1,000 jobs and remodel stores

RICHMOND, Va. — Circuit City Group, the second-largest U.S. consumer-electronics chain, said it will close eight distribution centers and cut 1,000 jobs as it remodels most of its superstores and ends appliance sales.

Circuit City expects fiscal second-quarter earnings of 32 cents, less than the 35 cents it earned in the year-ago period. It will also take a second-quarter charge of $30 million, or 9 cents a share, to close distribution centers. Circuit City had been expected to earn 43 cents in the quarter, the average estimate of analysts polled by First Call/Thomson Financial.

The company's stock has fallen 28 percent this year. In June, the company warned gross-profit margins would be narrower than expected, hurt by a decline in demand for major appliances. The store remodelings and cutting appliances will make room for expanded consumer-electronic and home-office product offerings.

Circuit City said it expects fiscal third-quarter earnings of 16 cents a share, including charges to remodel stores in Florida. It expects fourth-quarter earnings of 98 cents, more than the 96-cent First Call average estimate, as the company sees benefit from the remodelings.

The company expects 2000 earnings of $1.60, including charges, less than the First Call average estimate of $1.99.

Circuit City will close six distribution centers by year-end, and two more centers in the next 12 months.

The company has about 573 Circuit City superstores and 43 mall-based Circuit City Express stores.