Circuit City the popular electronics retail outlet plans to temporarily shutdown its 155 retail outlets in the country and exit 12 markets completely. This accounts for nearly 20% of its 720 stores. Though the impact of recession was prevalent in Banking and Finance till now, this is the first major impact in Retail business. Circuit city has been one of the favorite electronics destination during the festive seasons.
Circuit City has announced that the declining consumer confidence as main reason for this step. It aims to preserve cash and achieve savings in terms of operational cost and salaries to employees.
This will directly impact more than 2000 of its employees. The number could be even higher as Circuit City is cutting positions in operating stores as well.
This event in turn could trigger similar actions from other electronic and high end retail outlets, as the consumers are cutting down their electronic and entertainment spendings in a big way.