On the heels of reports that electronics makers and retailers were facing a difficult holiday, a market giant that operates 712 superstores in the United States and 770 stores in Canada has announced that it’s closing 155 U.S. stores.

 

Officials from Circuit City Stores, Inc. say they plan to reduce new store openings and renegotiate certain leases to reduce costs in this slower economy.

 

According to James A. Marcum, vice chairman and acting president and chief executive officer of Circuit City, since late September, events in the financial and consumer markets have caused 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,” Marcum said. “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.”

 

It isn’t clear how many employees will be affected. Circuit City said it would cut its U.S. workforce by 17 percent with the store closings

 

The company had nearly 46,000 employees at the end of February, according to its Web site.

 

Some analysts say Circuit City could file for bankruptcy as soon as directly after the holidays.

 

According to Anthony Chukumba, an analyst with FTN Midwest Securities who was interviewed by Reuters (News - Alert) reporter Karen Jacobs, Circuit City likely will get through at least December.

 

“We could see additional store closings and/or a Chapter 11 bankruptcy filing after the holidays,” Chukumba reportedly told Reuters.

 

It isn’t clear how this slower economy will affect the IT or telecommunications markets as a whole.

 

As TMCnet reported today, many analysts and industry insiders are anxiously awaiting for an announcement tomorrow from a San Jose, California-based networking equipment giant that’s viewed as a bellwether for the technology market at large.

 

The report  of the first-quarter financial results from Cisco Systems Inc. will come as some telecom companies report favorable earnings.

 

 

“GAAP net income rose to $3.1 million and non-GAAP net income rose 72.3 percent year-over-year to $4.8 million,” Tehrani writes. “In addition, this year the company has purchased over four million shares of its stock.”

 

The news out of Richmond, Virginia-headquartered Circuit City is far worse.

 

Officials there say they’re looking to restructure business as waning consumer confidence and a poor environment have taken their tolls on gross profit margins.

 

Marcum said the company regretted the impact that its announcement would have on the company’s associates, guests and the communities where its stores are located – likely the Kansas City and Phoenix areas, according to Reuters.

 

“We truly are grateful to each of our associates for their many contributions to the company,” Marcum said. “We are also grateful for the loyalty and support we have received from our guests in the impacted communities.”