Circuit City to break more store leases
RICHMOND - Circuit City Stores Inc., the nation's second-largest electronics retailer, said yesterday it plans to break the leases for almost all the 155 stores it plans to close this month.
The Richmond-based company was scheduled to auction the leases today as part of its Chapter 11 bankruptcy protection proceedings. But too few bids came in to hold the auction, spokesman Bill Cimino said.
"It's a tough retail real estate market now," Cimino said.
Circuit City filed for federal bankruptcy protection last month as it faced mounting debt, pressure from vendors, a drop in consumer spending, and heightened competition from Best Buy Co. and others. Its Canadian operations filed for similar protection.
The company had hoped to sell the leases to reduce costs, help it get financing, and aid restructuring, it said in court documents. Monthly expenses for the leases are about $6 million. The leases had an average of about 10 years remaining, Cimino said.
It now plans to break a total of 304 leases, including 150 it received approval to break this month for locations where stores closed earlier.
Circuit City disclosed plans in early November to close 155 of its more than 700 US stores by Dec. 31 and lay off about 17 percent of its domestic workforce, or up to 7,300 people.