Jim Babb, spokesperson for Circuit City, said while the closings are unfortunate it is not an exiting of the market for the company.Circuit City will still run 800 stores as part of its international segment down from approximately 950. Of the 62 store closings 45 were formerly Radio Shack, 14 are Battery Plus and three are THS stores.
“These 62 stores in Canada were not profitable and from our analysis they were not going to be profitable and they are not in any one province or region,” Babb said.
Babb added that roughly 140 full-time and 80 part-time positions, not people, will be eliminated. There is a possibility that some of these employees will be transferred to other nearby locations, he said.
“This is an important event for these folks and we are trying to be sensitive about it,” Babb said. Those that do lose their jobs will get separation packages.
The majority of these stores that are closing were once Radio Shack. As part of a court order in mid-2005 all of these outlets, mostly in malls across Canada, were rebranded The Source by Circuit City.
In 2004 Circuit City acquired InterTan Inc., a holding company based in Barrie, Ont., which owned the Radio Shack stores, for US$284 million. Circuit City was then forced to drop the Radio Shack brand in Canada because Radio Shack USA revoked the Canadian brand licensing rights shortly after the acquisition was announced.
This decision to close stores comes on the heels of Circuit City’s announcement to return 92 Rogers Plus stores to Rogers Wireless Inc. of Toronto.
The international (Canadian) segment also expects to incur costs.