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Monday, November 03, 2008

Circuit City Announces Closure of 155 Stores

by Calculated Risk on 11/03/2008 08:56:00 AM

We discussed this yesterday, and here is the announcement from Circuit City: Circuit City Stores, Inc. Provides Update on Liquidity and Announces Store Closing Plan

Due in part to its deteriorating liquidity position and the continued weak macroeconomic environment, the company has decided to take certain restructuring actions immediately, including closing 155 domestic segment stores, reducing future store openings and aggressively renegotiating certain leases.
This is another blow to mall owners and will impact new commercial real estate construction. The vacancy rate at malls is already soaring as announced last month:
For strip centers and other open-air shopping venues, the vacancy rate climbed to 8.4% in the third quarter from 8.1% in the second quarter.
The vacancy rate at malls in the top 76 U.S. markets rose to 6.6% in the third quarter, up from 6.3% in the previous quarter, to its highest level since late 2001, according to Reis.
Here is a list of the stores being closed. The store closings are concentrated in states with serious housing and economic issues: Arizona, California, Georgia, Florida, and more.