Source stores may be sold

LUCAS OLENIUK/TORONTO STAR
A shopper at The Source-By Circuit City in the GTA yesterday. Circuit City is closing 70 stores and cutting 400 jobs in Canada and the U.S. Email story
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Today's marketsHighs and lowsMutual fund finderMar 28, 2007 11:16 AM
Dana Flavelle
Business Reporter

North America's second largest consumer electronics chain today announced more cost-cutting, including the potential sale of its Canadian business.

Circuit City Inc., said it has asked Goldman Sachs to help it explore strategic alternatives for InterTAN Inc., which could include the sale of the company. InterTAN operates more than 800 stores in Canada under the name The Source by Circuit City.

Many of the small mall-based stores are former Radio Shack stores.

The decision comes amid increased competition in the consumer electronics market.

Circuit City also said today it is firing 3,400 higher-paid store employees and replacing them with lower-paid staff.

Last month, the company said it would shut 62 Canadian stores, and eliminate 290 jobs, including about 70 at InterTAN.

The stores were unprofitable, the company said.

The moves come in the wake of stiff price competition in flat-screen TVs, a popular holiday purchase, as even stores like Home Depot jumped into the market.

The company said it planned to discontinue certain product lines in Canada.