Circuit City Sales Down; Company Announces 2005 Store Plans
Jan 8, 2004
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Appliance and electronics retailer Circuit City Stores, Inc., based in Richmond, VA, U.S., has announced that its total sales for December 2003 declined 1 percent to U.S. $1.71 billion from $1.74 billion in December 2002, including a comparable store merchandise sales decline of 2 percent.
"Our December sales performance varied significantly by category," said W. Alan McCollough, chairman, president and CEO in a written statement announcing the company’s earnings. "We produced exceptionally strong comparable store sales growth in new and advanced technologies such as digital, LCD, and plasma televisions, digital satellite systems; digital imaging products, digital audio products, and satellite radio, as well as in DVD movies."
Mr. McCollough said that these results include substantial growth in Web-originated sales during the month. He added that comparable store sales growth in personal computer hardware was driven by double-digit sales growth in notebook computers and monitors.
"We also continued to see sales growth in the traffic-driving music software category," Mr. McCollough said. “Weak sales in many other categories, but particularly home audio and video game hardware and software, more than offset the sales strength in new and advanced technologies."
Mr. McCollough also noted that he believes the December sales performance reflects not only the company’s continued need to update the store base, "but also a need to increase the average ticket and to drive more traffic, exposing a broader base of consumers to the new Circuit City," Mr. McCollough said.
"Although December sales started relatively strong and picked up at the end of the month, we were not able to offset mid- month weaknes," he continued. "For the full month, traffic was up slightly, but not at the level of improvement we experienced in November."
Circuit City also updated its store opening plans for the fiscal year that begins March 1, 2004. "Last year, we completed an extensive analysis to identify the characteristics of a successful store. Specific real estate site features were among those key characteristics," Mr. McCollough said. "As a result, one of the priorities for determining our store opening plans is the availability of superior real estate that meets our site requirements.
Based on the availability levels, we expect to open 65 to 70 Superstores in the upcoming fiscal year. Slightly more than half of these stores will be relocations; the remaining stores will be entries into new trade areas, either in our existing or new smaller markets."
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