"We have a growing store base and competition that continues to open new stores," said Bruce H. Besanko, EVP and CFO. "We are continuing to grow to remain competitive."
Most existing stores have positive cash flows, so there will be few closures. All of the new stores will average about 20,000 sf, reflecting the move away from appliances. Seven "City" concepts already are open. About 80% of 2008 stores will be incremental units, with 20% being relocations. As the existing store base continues to age, that proportion will shift to relocations.
"Today people want the convenience of shopping online and picking up at the store," as well as testing items in the store, Besanko said. "These seven stores are the first full manifestations of our learnings in our stores."
The growth comes despite a disappointing quarter. Net sales decreased 3.1% from the previous year to just shy of $3 billion. Consolidated comparable store sales dropped 5.6%. The chain posted a net loss from continuing operations of $208 million, compared to a net loss of $19.9 million the previous year.
Circuit City operates 668 Superstores and 13 other locations in the US, and 789 stores and dealer outlets in Canada. Six are "The City," the company's next generation format.
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