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Author Topic: CC nyse at 3.84-Circuit City
BooDog
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It's a pink sheet market!!! LOL

Good to see you BTW P!!

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All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?

Posts: 7800 | From: Virginia | Registered: May 2006  |  IP: Logged | Report this post to a Moderator
Peaser
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Well, we'll probably see many companies falling off the big boards to the OTCBB in the coming year or two anyhow IMO.

U2 Boo.

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Buy Low. Sell High.

Posts: 10754 | From: The Land Of The Giants | Registered: Feb 2005  |  IP: Logged | Report this post to a Moderator
Rockster
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They may be finally realizing the problems they are in. Making changes.


Circuit City Halting Some FY09 Store Openings; Hires Advisor
Font size: A | A | A
3:37 PM ET 10/6/08 | Dow Jones
RELATED QUOTES

8:00 PM ET 10/7/08
Symbol Last % Chg
CC
0.50 0.00%
Real time quote.

By Mary Ellen Lloyd

Of DOW JONES NEWSWIRES

Circuit City Stores Inc. (CC) has put the brakes on opening some stores it had planned for the current fiscal year and has hired outside advisors to help in its restructuring effort.

Company spokesman Bill Cimino said Monday that the steps, which are on top of plans announced a week ago to suspend most store openings beginning next year, are tied to the troubled consumer electronics retailer's "comprehensive review of all aspects of our business."

"As mentioned in our recent earnings call, we cannot grow our way to success without first fixing our core business," Cimino said in an email.

He declined to provide specifics immediately on the advisory firm or how many store openings are delayed. But an industry source with knowledge of the situation said Circuit City had retained FTI Consulting, which has advised on several troubled retailers, including home decor specialist Bombay Co. and grocer Winn-Dixie Stores.

An FTI representative couldn't be reached immediately for comment.

The steps appear to provide fresh evidence that the Richmond, Va., company is moving more urgently to stem its losses as it heads into what's expected to be a weak holiday selling season.

Shares of Circuit City recently traded up 3 cents, or 5.3% at 59 cents a share despite a global selloff of stocks and fresh fears that retailers will suffer from further weakened consumer spending amid economic and financial market worries.

Fresh off of replacing Chief Executive Phil Schoonover with director James A. Marcum, who led the restructuring and ultimate sale of another electronics chain, Ultimate Electronics Inc., Circuit City last week said it would open 16 to 26 more stores before the Feb. 28 end of fiscal 2009. At the same time, it outlined intentions to suspend store openings "other than existing commitments" beginning with fiscal 2010.

But on Monday, Cimino said some of those 16 to 26 stores are now on hold.

Circuit City faces pressure from all sides as larger rival Best Buy Co. (BBY) continues to open stores and take market share. Meanwhile, the discount-pricing message of Wal-Mart Stores Inc. (WMT) seems to be resonating especially well with shoppers in the tough economic environment, and some analysts expect the retailing giant will unveil new deals on electronics ahead of the holidays that may upend specialty stores' efforts to maintain rational pricing.

For nearly nine months, critics have said Circuit City should conserve cash or use it to boost performance at existing stores rather than continue to open outlets as the chain loses market share. But for most of 2008, company executives said Circuit City, which pioneered the big-box electronics chain store, couldn't afford to close stores or cease expansion so long as competitors continued to add on.

The company readily admits that one of its biggest challenges is the fact that about 400 of its nearly 700 stores are too big, outdated, in suboptimal locations, or all of the above. Many were built in the 1980s or 1990s, when Circuit City could afford to build in cheaper, more out-of-the-way locations because it was the market leader in electronics.

Averaging 34,000 square feet, the stores had ample space to sell appliances, but Circuit City got out of that business years ago. Now, 20,000 square feet is plenty. Unfortunately for Circuit City, all but about 71 of its stores have leases running through at least 2014, with 279 stores on leases through at least 2019, according to filings with the Securities and Exchange Commission.

Of its $3.98 billion in off-balance sheet obligations for operating lease commitments, more than half is tied to leases with more than four years remaining.

And even though the company spun off auto superstore business CarMax Inc. (KMX) five years ago, it remains contingently liable for $341 million in leases for 23 CarMax stores.

Analysts say Circuit City finally seems serious about fixing what has long been viewed as a major problem in its store base, and they expect the retailer may either close underperforming stores or renegotiate lease terms.

Ironically, Circuit City's weak financial position seems to give it more leverage as it talks with landlords.

"If you're a really healthy retailer, it's difficult to get a concession (on leases), because that's the thing the landlord relies on," said Andy Graiser, co-president of real-estate advisory firm DJM Realty LLC. "If a retailer is struggling, there's a very good opportunity for rent reductions."

Graiser, whose firm has been handling store closings tied to Linens N' Things' Chapter 11 bankruptcy protection filing, declined to comment specifically on Circuit City's plans or prospects, as did principals at some other major real-estate advisory firms. But several said the general retail real-estate environment could work in favor of a company looking to lower rates or get out of some leases altogether.

And more retailers are trying just that, said Harold Bordwin, managing director of co-head of real estate services for KPMG Corporate Finance LLC. "The difference between now and a year ago is fairly dramatic," he said. "The level of economic concern and distress has increased dramatically for retailers."

Circuit City in August put on hold the completion of a $45 million distribution facility near Scranton, Pa., that had been scheduled to begin operations in time for the holidays.

Investors, meanwhile, are losing faith that it can address underperforming stores quickly enough, given its weakening balance sheet. Shares have fallen more than 65% in the last 10 days.

Circuit City ended its most recent quarter with $92.5 million in cash and short-term investments, down 78% from a year earlier, but it borrowed $215 million against its $1.3 billion inventory-secured credit line, which was more than analysts had estimated.

"They're definitely a buyer that's concerning to us that a couple of years ago was not," said Steve Lapsley, retailing industry manager for credit insurer Euler Hermes. Lapsley wouldn't comment specifically on whether it is providing credit insurance to Circuit City's suppliers.

- By Mary Ellen Lloyd, Dow Jones Newswires, 704-948-9145; maryellen.lloyd*dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=p6N7fvxBgNVlFcXE2xeYCg%3D%3D. You can use this link on the day this article is published and the following day.


> Dow Jones Newswires

10-06-08 1537ET

Copyright (c) 2008 Dow Jones & Company, Inc.

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BooDog
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now where's the DEAD cat bounce. lol
.4136

Circuit City loses credit agency approval
http://www.inrich.com/cva/ric/search.apx.-content-articles-RTD-2008-10-08-0175.h tml

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All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?

Posts: 7800 | From: Virginia | Registered: May 2006  |  IP: Logged | Report this post to a Moderator
Rockster
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Alright... since everything is tanking.

I bought cc *.41 tonight.

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Peaser
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Good luck with that...

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Buy Low. Sell High.

Posts: 10754 | From: The Land Of The Giants | Registered: Feb 2005  |  IP: Logged | Report this post to a Moderator
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