Circuit City Stores (NYSE: CC) shares dropped sharply after it reported disappointing earnings, but there is at least one remaining hope for shareholders. The electronics retailer said it would undergo an extensive review of its strategic options. Unfortunately, investors looking for a sale transaction may be waiting awhile- the company noted that it was initially focused on internal improvements to operate as a standalone business. Regardless, a successful turnaround is definitely a prospect worth watching!
Circuit City shares have been in a free fall ever since 2007 when the company first started experiencing a slowdown in sales. This latest quarter has been a nail in the coffin as it posted wider losses and withdrew its financial outlook as it reviews its business ahead of the holiday season. This follows the departure of its Chairman and CEO just last week. Meanwhile, experts are predicting an extremely bleak holiday season this year.
So, where's the opportunity here? Well, Circuit City still owns a substantial number of retail stores and any new blood in management could help a turnaround. Circuit City may have posted losses for five of the six quarters, but any successful execution this holiday season versus competitor Best Buy could help position it for the future. The company plans to launch a new marketing campaign, upgrade its store signage, and boost its in-stock position on key categories.
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