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Circuit City plans to close some stores in U.S., Canada

SHARE Circuit City plans to close some stores in U.S., Canada

RICHMOND, Va. (AP) — Circuit City Stores Inc., the nation's No. 2 consumer electronics retailer, said Thursday it plans to close seven domestic Superstores, a Kentucky distribution center and 62 company-owned stores in Canada to cut costs and improve its financial performance.

The closings will take place over the next six months at an expected total cost of $85 million to $105 million, all to be incurred in the current fourth fiscal quarter, which ends Feb. 28, Circuit City said.

"Because of the intensified gross margin pressures that we saw in the third quarter within the flat panel television category, we launched efforts to accelerate the timing of planned initiatives to improve sales and gross margin, as well as improve the efficiency of our expense structure," chief executive Philip J. Schoonover said in a statement.

Shares of Circuit City rose $1.07, or 5.19 percent, to close at $21.67 on the New York Stock Exchange.

Circuit City would not identify the stores to be closed because company officials were in the process of notifying employees. The stores will be closed Monday, then reopen Wednesday for clearance sales, spokesman Bill Cimino said.

The company could not immediately determine the exact number of employees who would lose their jobs. The distribution center employs 12 people, and each of the seven Superstores slated for closing employs about 30 full-time and part-time workers, Cimino said.

Circuit City operates through 643 Superstores and 12 other locations in 158 U.S. markets. The international segment has more than 800 retail stores and dealer outlets in Canada. The company also sells it products online.