Circuit City to Sell Bank-Card Division
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Circuit City Stores Inc. plans to sell the bank-card portion of its financing unit amid rising defaults to focus on its stores, where it said sales were dropping.
Circuit City expects a $200-million loss on the sale, or 96 cents a share, most of which will be recorded in its fiscal second quarter. The Richmond, Va.-based company said it would keep offering private-label credit cards.
Selling the bank-card business could free up cash for its retail business, in which same-store sales fell 8% in June and July because of a drop in customer traffic, lower prices and disruptions from remodeling, Circuit City said.
Shares of Circuit City dropped 5 cents to $9.50 on the NYSE.
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