Alan McCollough Continued Quotations

We believe the December sales performance reflects not only our continued need to update the store base, but also a need to increase the average ticket and to drive more traffic, exposing a broader base of consumers to the new Circuit City,

We view the additional advertising expense during the quarter as an important investment in building the Circuit City brand. Since our retail stores team held labor expense relatively flat on a dollar basis, we were able to gain significant leverage on our higher level of sales as we continued work to optimize the labor model in our stores." ()

Continued strength of the consumer electronics and home office categories and the recent substantial weakness in major appliances accelerated our decision to reformat all existing superstores. The major appliance business carries high fixed costs and tends to be more cyclical than other retail categories." ()