Full Description

Circuit City Stores, Inc., incorporated in 1949, is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The Company has two segments: domestic and international. The domestic segment is engaged in the business of selling brand name consumer electronics, personal computers (PCs), entertainment software and related services in its stores in the United States and via the Web at www.circuitcity.com and www.firedog.com. As of May 31, 2008, the Company’s domestic segment operated 687 Superstores and nine outlet stores in 158 United States media markets. The international segment, which comprises the operations of InterTAN, Inc., is engaged in the business of selling private-label and brand-name consumer electronics products in Canada. As of May 31, 2008, the international segment conducted business through 775 retail stores and dealer outlets, which consisted of 502 Company-owned stores and 273 dealer outlets. The international segment also operates a Website at www.thesource.ca.

Circuit City has an integrated multi-channel business model, which allows customers to shop in its stores, on the Web and via the telephone. Through www.circuitcity.com, www.firedog.com and telephone call centers, customers have access to a selection of consumer electronics, technology and entertainment products and related services, as well as to customer service. The Company’s Website at www.circuitcity.com offers nearly 150,000 customer ratings and reviews of products, as well as product and technology information. Customers may view real-time, in-store inventory of products selected on www.circuitcity.com, purchase products online and pick up eligible products in a nearby store. As an enhancement of its multi-channel capabilities, Circuit City offers a 24/24 Pickup Guarantee for qualifying purchases made through its Website or telephone call centers. Under this policy, qualifying purchases will be ready for customers to pick up at their designated store within 24 minutes of purchase confirmation or the customer will receive a Circuit City gift card.

The international segment stores operating under the trade name The Source By Circuit City typically have a small store format, and are located in malls and shopping centers. Each store provides products and services to meet a range of consumer electronic needs. Dealer outlets are independent retail businesses that operate under their own trade names but are permitted, under dealer agreements, to purchase any of the products sold by The Source By Circuit City. The dealer agreements contain a sub-license permitting the dealers to designate their consumer electronics department or business as a The Source By Circuit City dealer. On January 28, 2007, Rogers Wireless Inc. terminated its agreement with InterTAN Canada Ltd. with respect to the operation of the Rogers Plus stores in the international segment.

During the fiscal year ended February 29, 2008 (fiscal 2008), Circuit City introduced a Superstore format called the city that features an interactive environment with 20,000 square feet per store. Circuit City’s the city prototype includes approximately 75% of the total square footage as selling area. Larger prototypes are typically 30,000 or 34,000 square feet. Smaller prototypes are typically 20,000 square feet. During fiscal 2008, the Company opened 43 incremental Superstores, relocated 18 Superstores, remodeled one Superstore into the Company’s the city format and closed three Superstores. An additional Superstore was closed in February 2008. International segment stores operating under the trade name The Source By Circuit City have a small store format with an average of 2,129 square feet.

Circuit City offers a selection of products and services through its stores, on the Web and via the telephone. The Company’s major sales categories are video, which includes televisions, imaging products, digital versatile disk (DVD) hardware, camcorders, furniture and related accessories; information technology, which includes PC hardware, telecommunications products and related accessories; audio, which includes home audio, mobile audio, portable audio and navigation products, and related accessories; entertainment, which includes movie software, music software, game software, game hardware and PC software, and warranty, services and other, which includes extended warranty net sales, revenues from PC services, mobile installations, home theater installations and product repairs, net financing and revenues received from third parties for services subscriptions.