Circuit City announced today it will close 155 underperforming, domestic stores in 55 markets and reduce the number of stores it opens in the future. The move, which will take Circuit City out of 12 U.S. markets, is part of a restructuring strategy intended to improve the company's liquidity position and brace the company for an economic downturn.

The stores to be close amount to approximately 20% of the company's total number of stores and account for about $1.4 billion in net sales. For entertainment companies, this means a considerable number of locations will no longer sell their CDs and DVDs. Because of the titles typically carried by Circuit City, major labels and studios will be disproportionately affected. CD and DVD sales at Circuit City have regularly been down by double digits in recent quarters.

According to NPD Group, Circuit City was tied with Borders, with 2% market share, as the eighth music retailer in the country as of January 2008.