Circuit City on Monday said it was shutting down more than a hundred poorly performing stores in the U.S. in an effort to increase the company's cash reserves.
The company is closing 155 stores and plans to reduce the openings of new stores, the company said in a statement on Monday. Stores in Phoenix, Chicago and Brooklyn, New York, will be closed in the future, according to a list provided on Circuit City's Web site.
Openings of 10 new stores will be stopped as part of the retailer's restructuring efforts, the company said. After opening two stores in fiscal 2009, the company intends to suspend opening new stores beginning fiscal 2010.
The process of closing stores and emptying out inventory will begin on Nov. 5, according to the company. Circuit City operates 770 stores: 721 in the U.S. and the rest in Canada.
Blaming "deteriorating liquidity" and a weakening economy, the company said the closures will reduce Circuit City's U.S. workforce by 17 percent. A spokeswoman could not provide the employee count in the U.S.
The credit crunch has made it difficult for the company to purchase goods from its partners, the company said in the statement.
In April, Blockbuster made an offer of up to US$1.33 billion to buy Circuit City, subject to evaluation of Circuit City's books. After months of resistance, Circuit City opened its books for Blockbuster to evaluate as part of the due diligence process. Blockbuster pulled its offer after viewing the retailer's books, saying the acquisition wasn't in the company's best interest.