The latest economic casualty, Circuit City said Monday it plans to shutter 155 retail stores and slash its work force.
Circuit City shares jumped $0.09, or 35 percent, to $0.35 in midday trading after the announcement.
"Since late September, unprecedented events have occurred in the financial and consumer markets causing macroeconomic trends to worsen sharply,” CEO James Marcum said in a statement.
The company said it will cut 17 percent of its work force as a result of shutting down stores.
The Richmond, Virginia, electronics giant plans to renegotiate some of its lease terms and cut future store openings in an effort to cut costs.
Circuit City blamed weaker consumer confidence and a battered retail sector for hammering its sales and bottom line. Circuit City said after its second-quarter earnings results some of its vendors made restrictive payment and credit terms on the company.
Last week, the University of Michigan’s Consumer Sentiment Index showed lowered consumer confidence. The Consumer Confidence index measured in at a score of 38, below market forecasts for a 52 score and the 59.8 reached in the previous reporting period.
Another indicator, the U.S. Census Bureau’s Retail Sales report October 15 showed retail slipped 1.2 percent, below market expectations for a 0.7 percent decline and a 0.4 percent decline hit in the previous reporting period.
Circuit City said it plans to keep 566 stores in the United States.