Circuit City Stores Inc. said Monday that it is closing stores in Escondido, Murrieta, Vista and 152 other locations in an effort to return the nation's No. 2 consumer electronics retailer to profitability.

The closings represent more than 20 percent of its more than 700 stores in 55 U.S. markets. The closings would eliminate several thousand jobs, about 17 percent of Circuit City's domestic work force, by the end of the year.

Circuit City also said it will further reduce new store openings and plans to work with landlords to renegotiate leases, lower rent or terminate agreements.

The retailer's lease on its Vista location near Highway 78 expires in January. The City Council has privately discussed terms for buying or leasing the building, which is in Vista's redevelopment area, but officials have declined to speak publicly about their plans.

The property owner is seeking $5.9 million for the site. A representative confirmed discussions but said "nothing has materialized."

Circuit City opened its Murrieta location earlier this year in the two-year-old Village Walk shopping center.

Stores in Carmel Mountain, Encinitas and Temecula are not slated to close.

The 155 closings come at the cusp of a crucial holiday shopping season that could determine the company's future; slower consumer spending has left even less-vulnerable retailers worried.

"The weakened environment has resulted in a slowdown of consumer spending, further impacting our business as well as the business of our vendors," James A. Marcum, vice chairman and acting president and chief executive officer said in a statement. "The combination of these trends has strained severely our working capital and liquidity."

Marcum called the decision to close stores "difficult, but necessary."

Based on nearly 43,000 employees as of Feb. 29, 17 percent could be up to about 7,300 workers, or an average of 45 employees per location.

But the company said the number likely would be lower in part because employees in some markets may become employed at other stores. It would not give further details.

Circuit City shares rose 10 cents to close at 36 cents Monday.

The company said it expects the stores it is shuttering, which generated about $1.4 billion in net sales in fiscal 2008, will not open Tuesday. Sales associated with store closings will begin on Wednesday.

Circuit City spokesman Bill Cimino said the decision to exit 12 markets was based on store performance rather than for competitive reasons.

"There are some markets where we have more competitors, there are some markets where we have less competitors, in all, we're closing 155 stores that were underperforming," Cimino said. "We're taking this action because we're doing this for the future of the company."

Circuit City also provided updates on other aspects of its business, including restrictive actions taken by vendors, including limiting credit for purchases. But the company said while it is working to secure support from vendors, the "current mix of terms and credit availability is becoming unmanageable for the company."

It also said it has been unable to collect an income tax refund of about $80 million that Circuit City believes it is owed from the federal government.

The company has had only one profitable quarter in the past year, posting a wider second-quarter loss in September with a 13 percent decline in sales at stores open at least a year. Its results have weakened as the company faces significant declines in traffic, heightened competition from rival Best Buy Co. and others and a weakened brand position.

Founded in 1966, Best Buy expanded rapidly over the course of the 1990s with new stores in highly visible shopping centers. Circuit City, in contrast, operates many stand-alone stores.

An analyst at J.P. Morgan upgraded Best Buy's shares last week, saying that it would suffer less than other consumer electronics stores in a deepening electronic downturn.

Best Buy President and Chief Operating Officer Brian Dunn told a small gathering of reporters last week that it was prepared to grab real estate and market share in the event that other consumer electronics stores close, according to the trade publication Video Business.

"We're sure there'll be material consolidation in the industry," the magazine quoted Dunn as saying. "If storefronts close, we'll jump in and connect with those consumers."

Best Buy's shares gained 88 cents to close at $27.76 Monday on the New York Stock Exchange.

Circuit City, which is reviewing its operations while exploring strategic alternatives, has been working with advisers to determine how to substantially improve its operating and financial performance.

The company said last week that the New York Stock Exchange has warned it that its stock price is not high enough for continued listing.

The NYSE said Circuit City shares 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. Its shares have closed under a dollar in trading since Sept. 30, when they closed at 76 cents. Shares have traded between 17 cents and $8.24 in the last year.

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 exceed $1 within six months following receipt of the notice.

A major Circuit City shareholder -- Classic Fund Management AG, a Liechtenstein-based asset management company -- also said in a regulatory filing last week 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.

Circuit City has been under new leadership since late September when Chief Executive Philip J. Schoonover agreed to step down. He was replaced by Marcum, who was tapped to oversee Circuit City's multiyear turnaround efforts.

http://www.circuitcity.com

Staff writer Craig Tenbroek and the Associated Press contributed to this article. Contact staff writer Chris Bagley at (760) 740-5444 or cbagley@nctimes.com. Bagley blogs about local economic trends at www.nctimes.com/blogs/minding_your_business.