Circuit City Posts 2Q Loss
Atlanta, Circuit City Stores reported a wider-than-expected second-quarter loss on Thursday, as sales sagged for desktop computers, projection and tube TVs.
The retailer, which is cutting jobs and changing store procedures in a bid to turn business around, said it expected a loss from continuing operations for the third quarter and full year, but forecast a profit for the fourth quarter that includes the Christmas holiday.
The loss came to $62.8 million for the second quarter that ended Aug. 31, compared with a profit of $10 million a year earlier. Sales fell 6.2% to $2.64 billion, while same-store sales fell 7.9%.
In the United States, same-store sales fell 8%. Circuit City said U.S. Web and other direct-channel sales rose 20%, while computer-service and home-theater installation revenue rose 22%.
Company officials still plan to open 60 to 65 new and relocated U.S. superstores in fiscal 2008, and two-thirds of the openings will be 20,000-sq.-ft. stores. The results came two days after larger rival Best Buy reported an 8.7% profit increase on revenue of $8.75 billion, beating analysts’ expectations. Best Buy also offered a bullish forecast for the rest of the fiscal year.
Borders to launch new Web site, breaks ties with Amazon
ANN ARBOR, Mich. As a way to separate from its well-known online partner, Borders Group Inc. has announced the launch of its new beta version Web site, the company said Wednesday.
While the site is set to officially launch during the first quarter of fiscal year 2008, it is still in early stages of completion. The Web site is said to include videos, Borders Book Club resources, and sample pages from books.
In addition to a new, independent website, Borders also plans to make changes to its retail stores, adding interactive features via kiosks.
Borders is also employing the services of ChoiceStream to provide revenue-driving product recommendations to Borders’ shoppers through its in-store computer search stations and its upcoming online store, driving the discovery of new books, music and movies.
Borders and online retailer Amazon have worked alongside each other for more than five years. Amazon has agreements with several other well-known retailers like Babies “R” Us. In May, Borders announced that it hired AT&T subsidiary Sterling Open Management to manage the new site.
Wal-Mart improves workers’ health benefits
Bentonville, Arkansas Wal-Mart Stores Inc. will be improving the health benefits packages provided to its full and part-time associates, the company announced today.
As one of the largest retailers in the world, Wal-Mart is providing its employees more options geared toward their personal needs. The 2008 benefits package includes reduced deductibles, pre-deductible health care credits and $4 co-pays for over 2,400 covered generic prescriptions. The generic prescription program, the company believes, will save associates approximately $25 million in 2008. The company’s open enrollment period will start September 22.
“We worked closely with our associates to design an even more affordable health benefits package based on what they told us they wanted and needed,” said Linda Dillman, evp of risk management, benefits and sustainability. “Ninety percent of our associates now have health insurance and we want that number to increase. Our health coverage next year will be even stronger, offer more options and give people more tools to help them save money and live better lives.”