DrewWilson
September 29th, 2008, 12:18 PM
Circuit City Stores Inc. (CC) put the brakes on expansion and hinted it may finally close weaker stores as its second-quarter net loss widened and cash reserves dwindled.
With customer traffic falling sharply as the No. 2 U.S. consumer-electronics retailer heads into the critical holiday selling season, Circuit City also blamed some product shortages on its own aggressive inventory management. Wall Street expressed growing fears that vendors are also keeping the retailer on a tight leash in terms of product availability, and shares fell 15.1% to $1.15, a nearly 23-year low.
"It may be necessary for Circuit City to consider reorganizing as part of a strategy to rid itself of its unprofitable stores," Raymond James & Associates analyst Dan Wewer told clients.
"Circuit City's pressures are coming from all sides - and the overarching macroeconomic conditions are still quickly worsening," said Stifel Nicolaus analyst David Schick. "The risks of bankruptcy are very real, in our opinion."
More... (http://money.cnn.com/news/newsfeeds/articles/djf500/200809291354DOWJONESDJONLINE000589_FORTUNE5.htm)
With customer traffic falling sharply as the No. 2 U.S. consumer-electronics retailer heads into the critical holiday selling season, Circuit City also blamed some product shortages on its own aggressive inventory management. Wall Street expressed growing fears that vendors are also keeping the retailer on a tight leash in terms of product availability, and shares fell 15.1% to $1.15, a nearly 23-year low.
"It may be necessary for Circuit City to consider reorganizing as part of a strategy to rid itself of its unprofitable stores," Raymond James & Associates analyst Dan Wewer told clients.
"Circuit City's pressures are coming from all sides - and the overarching macroeconomic conditions are still quickly worsening," said Stifel Nicolaus analyst David Schick. "The risks of bankruptcy are very real, in our opinion."
More... (http://money.cnn.com/news/newsfeeds/articles/djf500/200809291354DOWJONESDJONLINE000589_FORTUNE5.htm)