NYSE warns Circuit City; investor cuts stake

[October 31, 2008]  RICHMOND, Va. (AP) -- Circuit City Stores Inc. said Thursday the New York Stock Exchange has warned it that its stock price is not high enough for continued listing.

The NYSE said shares in the nation's No. 2 consumer electronics retailer had an average closing price of less than $1 over 30 consecutive trading days as of Oct. 22, falling short of the exchange's requirement.

Circuit City shares have fallen as its results have weakened amid a deteriorating retail environment and heightened competition from rival Best Buy Co. and others. Since the beginning of the year, shares have lost most of their value, down 93 percent.

Its shares have closed under a dollar in trading since Sept. 30, when the stock closed at 76 cents. Shares rose a penny to close at 30 cents in trading Thursday but fell a penny in aftermarket electronic trading to 29 cents.

In order to regain compliance with the NYSE, Circuit City's common stock share price and the average share price over a consecutive 30-trading-day period must both exceed $1 within six months following receipt of the notice.

The company's "CC" symbol will receive a ".BC" indicator to show it is below the continued listing standards. Circuit City has 10 business days to notify the NYSE how it will remedy the price deficiency.

Asked how Circuit City will convey its plans to regain compliance, spokesman Bill Cimino said the company "will have those conversations with the Exchange in due course."

Earlier Thursday, a major Circuit City shareholder -- Classic Fund Management AG, a Liechtenstein-based asset management company -- said in a regulatory filing that it cut its holdings to 8.2 million shares, or about 4.8 percent, from 9.5 million shares, or 5.6 percent. It did not disclose a reason for the change.

Richmond, Va.,-based Circuit City, which is in the midst of a comprehensive review as it works to operate as a standalone business while exploring strategic alternatives, has had only one profitable quarter in the past year. It posted a wider second-quarter loss last month with a 13.3 percent decline in same-store sales.

Last week, The Wall Street Journal said Circuit City was considering closing at least 150 locations and slashing thousands of jobs to avert filing for Chapter 11 bankruptcy protection, citing "several people familiar with the matter." The company did not comment on the report.

Closing dozens of stores would allow the retailer to liquidate $350 million in inventory that could be used to pay real estate costs, including leases on abandoned sites.

[Associated Press; By MICHAEL FELBERBAUM]

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