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Circuit City Stores Announces Store Closing Plan
KANSAS CITY, (PRNewswire), November 3 2008 - Circuit City Stores, Inc. has announced that due in part to its deteriorating liquidity position and the continued weak macroeconomic environment, the company has decided to take certain restructuring actions immediately, including closing 155 domestic segment stores, reducing future store openings and aggressively renegotiating certain leases. The company also is considering all available options and alternatives to restructure its business.

The company expects that impacted stores will not open on Tuesday, November 4, and the store closing sales will begin on Wednesday, November 5. The company expects the sales to be completed no later than calendar year end.

Business and Liquidity Update

Over the past several weeks, a number of factors have impacted severely the company's liquidity position. These factors include the following:

-- Waning consumer confidence and a significantly weakened retail environment have impacted negatively the company's sales and gross profit margin rate to a greater degree than management had anticipated previously.

-- To date, the company has been unable to collect an income tax refund of approximately $80 million that the company believes it is owed from the federal government.

-- Due primarily to the weakened economic environment and its potential impact on the timing of sales of the company's inventory and costs and expenses associated with such sales, a recent third-party appraisal conducted for the company's asset-based credit facility resulted in a reduction of the estimated net orderly liquidation value of the company's inventory. This valuation adjustment was made despite the mix of merchandise remaining consistent with the previous appraisal in November 2007. This reduction has led to a lower borrowing base and reduced availability for the current period compared with what the company had expected previously.

James A. Marcum, vice chairman and acting president and chief executive officer of Circuit City Stores, Inc. said, "Since late September, unprecedented events have occurred in the financial and consumer markets causing macroeconomic trends to worsen sharply. The weakened environment has resulted in a slowdown of consumer spending, further impacting our business as well as the business of our vendors. The combination of these trends has strained severely our working capital and liquidity, and so we are making a number of difficult, but necessary, decisions to address the company's financial situation as quickly as possible."

Domestic Segment Real Estate Actions

As a result of the company's ongoing asset productivity assessment and working capital situation, the company has determined to take the following initial actions with respect to its domestic segment real estate portfolio and strategy:

-- Close 155 stores and exit certain markets: Circuit City plans to close 155 stores that are underperforming or are no longer a strategic fit for the company, including 5 in the Kansas City area. The stores identified for closure are located in 55 U.S. media markets, of which Circuit City will exit 12 U.S. media markets.

As a result of the store closures, Circuit City expects to reduce store operating, payroll and marketing expenses. The store closures will result in a reduction of approximately 17 percent of the domestic segment workforce. The company also expects to incur charges in fiscal 2009 associated with the above real estate actions. The company is currently evaluating the benefits and expenses associated with these changes, which are subject to the outcome of negotiations and store closure agreements. Presentation on the financial statements is currently being evaluated for accounting treatment.The company expects that impacted stores will not open on Tuesday, November 4, and the store closing sales will begin on Wednesday, November 5. The company expects the sales to be completed no later than calendar year end. "We deeply regret the impact today's announcement will have on our associates, our guests and the communities where these stores are located. We truly are grateful to each of our associates for their many contributions to the company. We are also grateful for the loyalty and support we have received from our guests in the impacted communities.

$2.4 Million in New Investment for Kansas City Business
KANSAS CITY, MO, (kansascityfrontpage.com), November 3, 2008 - Gov. Matt Blunt has announced that a Kansas City business has been approved for state tax credits from the Missouri Department of Economic Development (DED) under the Enhanced Enterprise Zone (EEZ) program to assist in the creation of nearly 10 new jobs and $2.4 million in new investment in the Kansas City area.

"Our pro-jobs, pro-growth policies are working for Kansas City and Missouri," Blunt said. "Missouri has been recognized for sound fiscal management and our work to help bring 78,000 additional jobs to our state in just over three years. I am pleased we are able to help this company create jobs in the Kansas City region where they will find an outstanding workforce."

Kansas City Structural Steel, Inc., has been approved for $88,070 in EEZ tax credits for the creation of nine new jobs in the Kansas City area and new investment of $2.4 million at 6817 Stadium Dr., Kansas City.

The Enhanced Enterprise Zone program was implemented in 2004. Enhanced enterprise zones are specified geographic areas designated by local governments and certified by the Department of Economic Development. Zone designation is based on certain demographic criteria, the potential to create sustainable jobs in a targeted industry and a demonstrated impact on local cluster development.

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