Shares of beleaguered electronics retailer Circuit City Stores Inc. rose Monday but closed down after a report said the chain might close at least 20% of its stores to shore up its finances and avoid filing for bankruptcy protection.
Citing "several people familiar with the matter," the Wall Street Journal said the nation's second-largest consumer electronics chain was considering closing at least 150 locations and slashing thousands of jobs to avert a Chapter 11 filing.
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.
Circuit City spokesman Jim Babb said the chain wouldn't comment on the details of the report or "rumors" as it continued "a comprehensive review of all aspects of our business" in order to accelerate its turnaround plan and boost its financial and operating performance.
Investors appeared pleased with the report, sending shares of Richmond, Va.-based Circuit City up more than 20% in morning trading.
But the shares closed down 4 cents, or 10.3%, at 35 cents.