Circuit City To Test New, Smaller Store Format

Looks like there will be new kind of electronics store in time for the holidays.

Circuit City, which has been struggling with disappointing results, confirms it is testing the "City," a smaller retail format. A spokesperson says these stores will "offer a more refined merchandise selection, with different fixtures and a more interactive experience."

The first will open before the holidays near the electronics retailer's Richmond, Va. headquarters. The spokesperson declined to say how many of the 60 to 65 domestic stores scheduled to open this year will use the new format.

Offering a more edited selection is a relatively novel approach for a company that has built its reputation on seemingly endless options. But while consumers say they love multi-optioned products, most are unable to make sense of the many features on their digital cameras, MP3 players, laptops and high-definition TVs.

Both Circuit City and Best Buy, its larger Minneapolis-based rival, have devoted considerable marketing muscle to services that can solve that problem. Best Buy has its Geek Squad. Circuit City has Firedog, a similar concept--which will also be available in the new stores, the spokesperson says.



And if walking consumers through their first flat-screen TV purchase was the theme of last year's fourth quarter, this year it's all about digital TV. Circuit City recently announced that it "will enhance its already robust efforts to help ensure that American television viewers are aware of the upcoming Digital Television (DTV) Transition," the company says.

"We know the DTV Transition will affect millions of homes that rely on over-the-air reception and we are ready to do our part, along with manufacturers, broadcasters and regulators, to inform and educate the public about this important technology advance," the company says. (U.S. TV stations are scheduled to stop transmitting analog signals on Feb. 17, 2009.)

For its part, Best Buy recently announced that it has yanked all remaining analog television products from store shelves and will sell only digital video tuners.

In its most recent quarter, Circuit City sales dropped 6.2%, to $2.64 billion, while comparable store sales fell 7.9% from the prior year. Although the company conceded that those results were a disappointment, executives said the chain was making "solid progress on our multi-year turnaround plan."

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