CIRCUIT CITY STORES INC, 10-K, 1995-05-26

CIRCUIT CITY STORES INC
10-K, 1995-05-26
RADIO, TV & CONSUMER ELECTRONICS STORES

Previous: VOLT INFORMATION SCIENCES INC, DEF 14A, 1995-05-26

Next: WASHINGTON MUTUAL INVESTORS FUND INC, 24F-2NT, 1995-05-26

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended February 28, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from to

Commission File No.: 1-5767
CIRCUIT CITY STORES, INC.
(Exact name of Registrant as specified in its charter)

VIRGINIA 54-0493875
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)

9950 Mayland Drive
Richmond, VA 23233
(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: (804) 527-4000

Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
Common Stock, Par Value $.50 New York Stock Exchange

Rights to Purchase Preferred Stock,
Series E, Par Value $20.00 New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes (X) No

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
K or any amendment to this Form 10-K [ ].

On May 5, 1995, the Company had 96,607,304 common shares outstanding.
The aggregate market value of the common shares held by non-affiliates
(without admitting that any person whose shares are not included in
determining such value is an affiliate) was $2,519,796,284 based upon the
closing price of these shares as reported by the New York Stock Exchange on
May 5, 1995.
DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference in
Parts I, II, III, and IV of this Form 10-K Report: (1) Pages 17 through 31 of
the Company's Annual Report to Shareholders for the fiscal year ended
February 28, 1995 (Parts I, II and IV) and (2) "Election of Directors,"
"Beneficial Ownership of Securities," "Executive Compensation, "Employment
Agreements and Change-in-Control Arrangements," "Compensation of Directors"
and "Section 16(a) Compliance" in the May 12, 1995 Proxy Statement, furnished
to shareholders of the Company in connection with the 1995 Annual Meeting of
such shareholders (Part III).

<PAGE>

TABLE OF CONTENTS

Item Page

PART I

1. Business 3

2. Properties 6

3. Legal Proceedings 8

4. Submission of Matters to a Vote of Security Holders 8

PART II

5. Market for the Company's Common Equity and Related Stockholder
Matters 9

6. Selected Financial Data 9

7. Management's Discussion and Analysis of Results of Operations and
Financial Condition 9

8. Financial Statements and Supplementary Data 10

9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 10

PART III

10. Directors and Executive Officers of the Company 10

11. Executive Compensation 10

12. Security Ownership of Certain Beneficial Owners and Management 10

13. Certain Relationships and Related Transactions 10

PART IV

14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K 11

<PAGE>

PART I

Item 1. Business.

Circuit City Stores, Inc. (the Company) was incorporated under the laws of
Virginia in 1949. Its corporate headquarters is located at 9950 Mayland
Drive, Richmond, Va. The Company's retail operations consist of Circuit City
Superstores, Circuit City electronics-only stores and mall-based Circuit City
Express stores. Effective May 1, 1994, all Western region Superstore
locations were transferred to and began operating as part of a wholly owned
subsidiary called Circuit City Stores West Coast, Inc. The Company has a
wholly owned credit card bank subsidiary, First North American National Bank,
that extends consumer credit. In addition, the Company is testing CarMax, a
retail Superstore format selling late-model used cars.

General. The Company is the nation's largest retailer of brand-name
consumer electronics and major appliances and a leading retailer of personal
computers and music software. It sells video equipment, including
televisions, digital satellite systems, video cassette recorders and
camcorders; audio equipment, including home stereo systems, compact disc
players, tape recorders and tape players; mobile electronics, including car
stereo systems and security systems; home office products, including personal
computers, peripheral equipment and facsimile machines; other consumer
electronics products, including telephones and portable audio and video
products; entertainment software; and major appliances, including washers,
dryers, refrigerators, microwave ovens and ranges. Music software, including
compact discs and audio tapes, was introduced on a limited basis in fiscal
1993 and was available in almost two-thirds of the Superstores at April 30,
1995.

Each of the Company's store locations follows detailed operating procedures
and merchandising programs. Included are procedures for inventory
maintenance, advertising, customer relations, store administration, display
of merchandise, security and demonstration and sale of products. Each store
carries a standard line of products selected at the corporate level and
supplied directly to the stores by the Company's regional warehouse
distribution facilities.

Expansion. The Company's goal is to secure the leading market share in
each market it serves. The benefits of this approach include maximizing
competitive position and sales. This approach also maximizes net profit
margins since costs, especially advertising, are reduced as a percentage of
sales.

Merchandising. Because the Company believes that local markets have
individual characteristics which vary greatly by the advertising,
merchandising and pricing strategies of competitors, it has organized its
marketing function to focus on markets with similar competitive conditions.
The Company's operating regions benefit from a centralized buying
organization. The central buying staff reduces costs by purchasing in large
volumes, structures a sound basic merchandising program and is supported by
advanced management information and distribution systems.

The Company's merchandising strategy emphasizes a broad selection of
products, including introductory products, and a wide range of prices.
Merchandise mix and displays are controlled centrally in an effort to ensure
a high level of consistency from store to store. Merchandise pricing and
selling strategies vary by market to reflect competitive conditions.

Although suggested retail prices are established by the Company's central
merchandising departments, each store manager is responsible for shopping the
local competition on a regular basis and has the authority to adjust retail
prices to meet market conditions. As part of its competitive strategy, the
Company advertises low prices and provides each customer with a low-price
guarantee. The Company will beat any legitimate price from a local
competitor stocking the same new item in a factory-sealed box. If a customer
finds a lower price, including the Company's own sale price, within 30 days,
the Company will refund 110 percent of the difference to the customer.

Suppliers. During fiscal 1995, the Company's 10 largest suppliers
accounted for approximately 55 percent of merchandise purchased by the
Company. The Company's major suppliers include Sony, Packard Bell, Thomson,
JVC, Whirlpool, Panasonic, Zenith, Hitachi, General Electric and Kenwood.
Brand-name advertised products are sold by all of the Company's retail
locations. The Company has no significant long-term contracts for the
purchase of merchandise.

In the past, the Company has not experienced any significant difficulty
obtaining satisfactory sources of supply and believes that adequate sources
of supply exist for the types of merchandise sold in its stores.

<PAGE>

Advertising. The Company relies on considerable amounts of advertising
and promotion to stimulate Superstore and electronics-only store sales.
Expenditures for these items were 4.7 percent of sales in fiscal 1995 (5.1
percent and 5.3 percent in fiscal 1994 and 1993, respectively). The
improvement in advertising as a percent to sales was primarily due to
comparable store sales growth. Also, as the Company adds new stores in
existing markets, the increased sales volume improves the efficiency of
existing advertising expenditures. These same efficiencies will be evidenced
in the Company's expansion into smaller trade areas, as existing television
advertising in neighboring markets already reaches many of these areas. The
Company primarily uses print advertising, including multi-page vehicles and
run-of-press newspaper ads, for Superstore and electronics-only store
advertising. The Company also emphasizes the use of multi-page vehicles to
allow a more extensive presentation of the broad selection of products and
price ranges it carries. These multi-page vehicles are generally distributed
in newspapers but are, in some cases, mailed directly to residences outside
the newspapers' area of circulation. Print advertising is supplemented in
varying degrees in local markets by television and radio commercials.

Competition. The brand-name consumer electronics and major appliance
business engaged in by the Company is highly competitive. The Company's
competitors include other full-service retailers, self-service retailers,
specialty retailers with differing product selections and services, general
merchandise retailers and local independent operators. Over the past three
years, the Company's competition has shifted to include more self-service
retailers that often offer a more limited product selection but at highly
competitive prices.

The Company uses pricing, selection and service to differentiate itself
from the competition. As part of its competitive strategy, the Company
strives to maintain highly competitive prices and offers every customer the
low-price guarantee previously described. The Company's Superstores offer a
broad product selection that includes 3,200 to 4,000 name-brand items
(excluding music software), depending on the selling square footage of the
Superstore. Professionally trained sales counselors, convenient credit
options, factory-authorized product repair, home delivery, installation
centers for automotive electronics, a toll-free product support line and a
30-day return policy reflect the Company's strong commitment to customer
service.

Customer Satisfaction. Extensive market research is conducted to measure
the Company's customer service record and to refine the Company's consumer
offer. More than 300,000 random telephone surveys are conducted each year to
track satisfaction among the Company's existing customer base. In fiscal
1995, the Company added random market share surveys of almost 10,000
consumers purchasing from Circuit City or competitors. These surveys,
conducted in 15 markets, establish a benchmark for comparing the Company's
performance to that of other retailers. Finally, to provide a detailed
understanding of consumer preferences, the Company conducted focus groups
with more than 1,000 consumers in four highly competitive markets during
fiscal 1995. Statistically valid data collected in these studies clearly
indicated that consumers want a high-quality shopping experience and that
Circuit City has successfully met that demand.

Training. The Company staffs its stores with commissioned sales
counselors, support personnel (cashiers and stockmen), a store manager, one
or more sales managers and, in larger stores, an operations manager. In
existing markets, all new sales counselors complete approximately two weeks
of training, including at least one week of classroom-based sessions.
Training in new markets lasts up to five weeks and adds coverage of store
merchandising and operations. To successfully complete sales training, all
sales counselors must pass a test demonstrating a high level of product
knowledge.

Initial sales counselor training is generally conducted at one of seven
regional training facilities. Each store includes a designated area for
ongoing training that utilizes manuals, computer-based programs and videos
developed by the Company's professional trainers. In fiscal 1995, the
Company completed a 14,000-square-foot, state-of-the-art video facility
designed for the production of high-quality audio, video and computer-based
training materials.

<PAGE>

Management development programs for store, sales and operations managers
include in-store and classroom training. Sessions focus on human resource
management, sales management and critical operating procedures. In fiscal
1995, these development programs enabled the Company to assign managers with
prior Circuit City management experience to the majority of new-market store
openings.

Consumer Credit. Because consumer electronics, personal computers and
major appliances represent relatively large purchases for the average
consumer, the Company's business is affected by consumer credit availability,
which varies with the state of the economy and the location of a particular
store. In fiscal 1995, approximately 19 percent of the Company's total sales
were made through its private-label credit card and 41 percent through third-
party credit sources.

The Company established a subsidiary, First North American National Bank
(FNANB), in fiscal 1991 to handle its private-label credit card business.
The credit card bank subsidiary is located in Marietta, Ga.

FNANB's credit extension and collection operations are fully automated with
state-of-the-art technology. This technology aids FNANB's aggressive
collection philosophy, which is comprised of early and frequent contact with
delinquent customers.

In addition to increased credit availability, this credit program provides
the Company with additional marketing opportunities, including direct mail
campaigns to credit card customers and special financing programs for
promotions. The new credit program also enhances the Company's customer
service philosophy. Interfacing the credit card bank subsidiary with the
Company's point-of-sale (POS) system has produced a rapid customer credit
approval process. A customer's application can be electronically scored, and
qualified customers receive approval in under five minutes.

FNANB sells receivables generated by the credit card programs to non-
affiliated entities under asset securitization programs.

In fiscal 1995, the Company partnered with American General Finance, Inc.
(AGF) to provide automated credit evaluation for customers who need another
installment credit option.

Systems. The Company's in-store POS system maintains an on-line record of
all transactions and allows performance to be tracked by region, store and
individual sales counselor. The information gathered by the system supports
automatic replenishment of in-store inventory from the regional distribution
centers and is incorporated into the Company's product buying decisions. The
POS system is interfaced with the credit approval systems of both FNANB and
AGF.

The Company's proprietary Customer Service Information System maintains an
on-line history of customer purchases and enables the Company to better assist
individuals with future purchases by ensuring that new products can be
integrated with existing products in the home. It also facilitates product
returns and product repair. In addition, this system supports Answer City(R),
a toll-free product support line. Answer City(R) provides the Company's
customers with access to skilled product specialists. From their homes,
customers can receive immediate answers to basic questions regarding product
usage and installation. This service is only available to Circuit City
customers.

Distribution. At April 30, 1995, the Company operated eight automated
electronics distribution centers. These centers are designed to serve stores
within a 500-mile range. They utilize conveyor systems with laser barcode
scanners to reduce labor requirements, prevent inventory damage and maintain
inventory control. The Company also operates smaller distribution centers
handling primarily appliances and larger electronics products. The Company
believes that the use of the distribution centers enables it to efficiently
distribute a broad selection of merchandise to its stores, reduce inventory
requirements at individual stores, benefit from volume purchasing and
maintain accounting control. In addition, the Company operates a centralized
distribution center for music software. Virtually all of the Company's
Superstore and electronics-only store merchandise is distributed through its
distribution centers.

<PAGE>

Service. The Company offers service and repair for nearly all the products
it sells. Customers are also able to purchase extended warranty plans on
most of the merchandise the Company sells.

At April 30, 1995, the Company had 27 regional, factory-authorized repair
facilities. To meet customer needs, merchandise needing service or repair
usually is moved by truck from the stores to the Company's nearest regional
service facility and is returned to the customer at the store after repair.
The Company also has in-home technicians who service large items not
conveniently carried to a store.

Extended warranty plans extend coverage beyond the normal manufacturer's
warranty period, usually with terms of coverage (including the manufacturer's
warranty period) between 12 and 60 months. In fiscal 1994, the Company
introduced two third-party extended warranty programs. The first of these
programs provides in-home service, rather than the in-shop service commonly
available in the marketplace, for most personal computer products, including
peripheral equipment. This program is provided by General Electric Company,
which has a large-scale operation in place to honor these commitments, and is
available in most major markets.

The second third-party program covers consumer electronics and major
appliances and offers extended service programs backed by insurance from
Virginia Surety Company, Inc., a subsidiary of AON Corporation. Virginia
Surety carries an A.M. Best Company rating of superior (A+). This program
was offered in approximately 65 percent of the Company's Superstores at April
30, 1995.

The Company sells its own extended warranty contracts in markets where the
third-party programs are not available.

Seasonality. Like other retail businesses, the Company's sales are greater
in the fourth quarter of the fiscal year than in other periods of the fiscal
year because of holiday buying patterns. A corresponding pre-seasonal
inventory build-up is associated with this sales volume. This increased
sales volume results in a lower ratio of fixed costs to sales and produces a
higher ratio of operating income to sales in the fourth fiscal quarter. The
Company's sales for the fourth fiscal quarter (which includes the Christmas
season) were $1,910,235,000 in fiscal 1995, $1,406,736,000 in fiscal 1994,
and $1,098,252,000 in fiscal 1993 and represented approximately 34 percent of
sales in all three fiscal years.

Employees. On April 30, 1995, the Company had 18,519 hourly and salaried
employees and 12,479 sales employees working on a commission basis.
Additional personnel are employed during peak selling seasons. Management of
the Company considers its relationship with its employees to be good. None
of the Company's employees is subject to a collective bargaining agreement.

Item 2. Properties.

At April 30, 1995, the Company's retail operations were conducted in 356
locations. The Company operates four Circuit City Superstore formats with
square footage and merchandise assortments tailored to the population and
volume expectations for specific trade areas. The "D" format was developed
in fiscal 1995 to serve the most populous trade areas. Selling space in the
"D" format averages approximately 24,000 square feet with total square
footage averaging approximately 42,000. The "D" stores offer the largest
merchandise assortment of all the formats. The "C" format is designed to
serve moderately smaller trade areas and provides a highly competitive
merchandise assortment. New "C" stores typically have about 17,000 square
feet of selling space; total square footage for all "C" stores averages
approximately 34,000. The "B" format is often located in smaller markets or
in trade areas that are on the fringes of larger metropolitan markets.
Selling space in these stores averages approximately 10,000 square feet with
an average total square footage of approximately 24,000. The "B" stores
offer a broad merchandise assortment that maximizes returns in these less
populated areas. The "A" format serves the least populated trade areas.
Selling space in the existing stores averages approximately 8,000 square
feet, and total square footage averages approximately 16,000. The "A" stores
feature a layout, staffing levels and merchandise assortment that creates
high productivity in the smallest markets.

The five electronics-only stores offer the Company's full line of consumer
electronics and a limited selection of major appliances. Selling space in
these stores averages approximately 4,000 square feet with an average total
square footage of approximately 8,000. The Company's 33 mall-based Circuit
City Express stores are located in regional malls, average approximately
3,000 square feet in size and sell small, gift-oriented items.

<PAGE>

The following table summarizes the Company's stores as of April 30, 1995:
<TABLE>
Superstores Electronics- Mall
D C B A Only Stores Total
<S> <C> <C> <C> <C> <C> <C> <C>
Alabama - 5 - - - - 5
Arizona 1 6 1 - - 2 10
Arkansas - 2 - - - - 2
California 1 58 9 - - 2 70
Delaware - 1 - - - 1 2
District of Columbia - - - - - 1 1
Florida - 26 6 - - 1 33
Georgia 1 9 3 - - - 13
Illinois 4 18 3 - - 2 27
Indiana - 1 1 - - - 2
Kansas 1 - - - - - 1
Kentucky - 5 - - - - 5
Louisiana - 5 - - - - 5
Massachusetts 1 7 3 - - 5 16
Maryland - 11 - - 2 4 17
Minnesota - 7 - - - 3 10
Missouri 1 8 - - - 1 10
Nevada - 3 - - - - 3
New Hampshire - 4 - - - 1 5
New Jersey - 4 - - - - 4
New York - - - - - 3 3
North Carolina - 9 2 - - - 11
Ohio 3 3 - - - 1 7
Oklahoma - 2 1 - - - 3
Oregon 1 3 - - - - 4
Pennsylvania - 7 - - - 1 8
Rhode Island - 1 - - - - 1
South Carolina 1 4 - - - - 5
Tennessee - 8 - - 1 - 9
Texas - 28 1 2 - 1 32
Utah 4 - - - - - 4
Virginia - 11 5 3 - 4 23
Washington 1 2 - - - - 3
West Virginia - - - - 2 - 2
20 258 35 5 5 33 356
</TABLE>

Of the stores open at April 30, 1995, the Company owns 17 stores (10 of
which have land leases) and leases the remaining 339 stores. Three of the
owned stores are financed by Industrial Development Revenue Bonds that are
collateralized by the applicable land, building, and equipment.

For information with respect to obligations for leases, see note 7 of the
Notes to Consolidated Financial Statements on pages 29 and 30 of the
Company's 1995 Annual Report to Stockholders, which is incorporated herein by
reference.

The Company owns the land but leases the building in which its corporate
headquarters is located and leases another building on that site for
additional office space. In addition, the Company owns one location used for
additional office space and one location leased to others.

The Company owns a 388,000-square-foot consumer electronics/appliance
distribution center in Doswell, Va., a 387,000 square-foot consumer
electronics/appliance distribution center in Atlanta, Ga., and a 173,000-
square-foot electronics/appliance distribution center in Chehalis, Wash. The
Virginia and Georgia distribution centers have been financed with Industrial
Development Revenue Bonds.

The Company leases space for all warehouse, service and office facilities
except for the aforementioned properties.

<PAGE>

Item 3. Legal Proceedings.

Because of the nature of the Company's businesses, the Company is a party
to various legal proceedings that are incidental to its businesses.
Management believes, after consultation with legal counsel, that the outcome
of these proceedings will not have a material adverse effect upon the
financial condition or results of operations of the Company.

Item 4. Submission of Matters to a Vote of Security Holders.

No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year ended February 28, 1995.

Executive Officers of the Company.

The following table identifies the present executive officers of the
Company. The Company is not aware of any family relationship between any
executive officers of the Company or any executive officer and any director
of the Company. All executive officers are generally elected annually and
serve for one year or until their successors are elected and qualify. The
next general election of officers will occur in June 1995.

Name Age Office

Richard L. Sharp 48 Chairman of the Board,
President and Chief
Executive Officer

Richard S. Birnbaum 42 Executive Vice President
- Operations

W. Stephen Cannon 43 Senior Vice President and
General Counsel

Michael T. Chalifoux 48 Senior Vice President,
Chief Financial Officer and
Corporate Secretary

John A. Fitzsimmons 52 Senior Vice President
- Administration

W. Austin Ligon 44 Senior Vice President - Corporate
Planning and Automotive

W. Alan McCollough 45 Senior Vice President
- Merchandising

William E. Zierden 56 Senior Vice President
- Human Resources

Raymond M. Albers 53 Vice President and
Chief Information Officer

Mr. Sharp is a director and a member of the Company's executive committee.
He joined the Company in 1982 as executive vice president and was elected
president in 1984, chief executive officer in 1986, and chairman of the board
in 1994.

Mr. Birnbaum joined the Company in 1972. He was elected vice president in
1985, Central Division president in 1986, senior vice president - marketing
in 1991, and executive vice president - operations in 1994.

<PAGE>

Mr. Cannon joined the Company in April 1994 as senior vice president and
general counsel. Prior to joining the Company, he had been since 1986 a
partner in Wunder, Diefenderfer, Ryan, Cannon & Thelen, a Washington, D.C.,
law firm.

Mr. Chalifoux is a director and a member of the Company's executive
committee. He joined the Company in 1983 as corporate controller and was
elected vice president and chief financial officer in 1988. He was elected
senior vice president in 1991 and became corporate secretary in 1993.

Mr. Fitzsimmons joined the Company in 1987 as senior vice president -
administration.

Mr. Ligon joined the Company in 1990 as vice president - corporate
planning and communications. He was elected senior vice president - corporate
planning and communications in 1991. In 1994, Mr. Ligon assumed responsibility
for the Company's automotive operations. Prior to joining the Company, he
served in various capacities with Marriott Corporation.

Mr. McCollough joined the Company in 1987 as general manager of corporate
operations. He was elected assistant vice president in 1989, vice president
and Central Division president in 1991, and senior vice president -
merchandising in 1994.

Mr. Zierden joined the Company in 1984 as vice president - human
resources. He was elected senior vice president - human resources in 1989.

Mr. Albers joined the Company in 1989 as vice president and chief
information officer.

Part II

With the exception of the information incorporated by reference from the
1995 Annual Report to Stockholders in Item 2 of Part I and Items 5, 6, 7, and
8 of Part II and Item 14 of Part IV of this Form 10-K, the Company's 1995
Annual Report to Stockholders is not to be deemed filed as a part of this
Report.

Item 5. Market for the Company's Common Equity and Related Stockholder
Matters.

Incorporated herein by reference is the information appearing under the
heading "Common Stock" on page 21 of the Company's 1995 Annual Report to
Stockholders.

As of May 5, 1995, there were 8,009 shareholders of record of the Company's
common stock.

Item 6. Selected Financial Data.

Incorporated herein by reference is the information appearing under the
heading "Reported Historical Information" on page 17 of the Company's 1995
Annual Report to Stockholders.

The Company adopted FASB Technical Bulletin No. 90-1, "Accounting for
Separately Priced Extended Warranty and Product Maintenance Contracts," as of
March 1, 1990. The cumulative effect of adoption was a reduction in earnings
of $53,500,000, net of tax benefit, ($0.58 per share) in fiscal 1991.

Item 7. Management's Discussion and Analysis of Results of Operations and
Financial Condition.

Incorporated herein by reference is the information appearing under the
heading "Management's Discussion and Analysis of Results of Operations and
Financial Condition" on pages 17 through 21 of the Company's 1995 Annual
Report to Stockholders, except for the information appearing on page 21 of
such Annual Report under the heading "Common Stock."

<PAGE>

Item 8. Financial Statements and Supplementary Data.

Incorporated herein by reference is the information appearing under the
headings "Consolidated Statements of Earnings," "Consolidated Balance
Sheets," "Consolidated Statements of Cash Flows," "Consolidated Statements of
Stockholders' Equity," "Notes to Consolidated Financial Statements," and
"Independent Auditors' Report," on pages 22 through 31 of the Company's 1995
Annual Report to Stockholders. Incorporated herein by reference is the
information appearing under the heading "Note 10. Quarterly Financial Data
(Unaudited)" on page 30 of the Company's 1995 Annual Report to Stockholders.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

None.

Part III

With the exception of the information incorporated by reference from the
Company's Proxy Statement in Items 10, 11, and 12 of Part III of this Form
10-K, the Company's Proxy Statement dated May 12, 1995, is not to be deemed
filed as a part of this Report.

Item 10. Directors and Executive Officers of the Company.

The information concerning the Company's directors required by this Item
is incorporated by reference to the section entitled "Election of Directors"
appearing at pages 1 through 3 of the Company's Proxy Statement dated May 12,
1995.

The information concerning the Company's executive officers required by
this Item is incorporated by reference to the section in Part I hereof
entitled "Executive Officers of the Company" appearing at page 8.

The information concerning compliance with section 16(a) of the Securities
Exchange Act of 1934 required by this Item is incorporated by reference to
the section entitled "Section 16(a) Compliance" appearing at pages 12 and 13
of the Company's Proxy Statement dated May 12, 1995.

Item 11. Executive Compensation.

The information required by this Item is incorporated by reference to the
sections entitled "Executive Compensation," "Employment Agreements and
Change-In-Control Arrangements," and "Compensation of Directors," appearing
at pages 6 through 8 and pages 11 and 12 of the Company's Proxy Statement
dated May 12, 1995.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The information required by this Item is incorporated by reference to the
section entitled "Beneficial Ownership of Securities" appearing at pages 4
and 5 of the Company's Proxy Statement dated May 12, 1995.

Item 13. Certain Relationships and Related Transactions.

None.

<PAGE>

Part IV

Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K.

(a) The following documents are filed as part of this Report:

1. Financial Statements. The following Consolidated Financial
Statements of Circuit City Stores, Inc. and subsidiaries and the
related Independent Auditors' Report are incorporated by
reference to pages 22 through 31 of the Company's 1995 Annual
Report to Shareholders:

Consolidated Statements of Earnings for the fiscal years ended
February 28, 1995, 1994 and 1993.

Consolidated Balance Sheets at February 28, 1995 and 1994.

Consolidated Statements of Cash Flows for the fiscal years ended
February 28, 1995, 1994 and 1993.

Consolidated Statements of Stockholders' Equity for the fiscal
years ended February 28, 1995, 1994 and 1993.

Notes to Consolidated Financial Statements.

Independent Auditors' Report.

2. Financial Statement Schedule. The following financial statement
schedule of Circuit City Stores, Inc. for the fiscal years ended
February 28, 1995, 1994 and 1993 is filed as part of this Report
and should be read in conjunction with the Consolidated
Financial Statements of Circuit City Stores, Inc.:

II Valuation and Qualifying Accounts and
Reserves S-1

Independent Auditors' Report S-2

Schedules not listed above have been omitted because they are
not applicable or are not required or the information required
to be set forth therein is included in the Consolidated
Financial Statements or Notes thereto.

3. Exhibits. The Exhibits listed on the accompanying Index to
Exhibits immediately following the financial statement schedules
are filed as part of, or incorporated by reference into, this
Report.

(b) Reports on Form 8-K.

The Company did not file any reports on Form 8-K during the last
fiscal quarter covered by this Report.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

CIRCUIT CITY STORES, INC.
(Registrant)

By s/Richard L. Sharp
Richard L. Sharp
Chairman of the Board,
President and
Chief Executive Officer

By s/Michael T. Chalifoux
Michael T. Chalifoux
Senior Vice President,
Chief Financial Officer and
Corporate Secretary

By s/Keith D. Browning
Keith D. Browning
Vice President,
Corporate Controller and
Chief Accounting Officer

May 26, 1995

<PAGE>

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated:

Signature Title Date

Alan L. Wurtzel* Director May 26, 1995
Alan L. Wurtzel

Michael T. Chalifoux* Director May 26, 1995
Michael T. Chalifoux

Richard N. Cooper* Director May 26, 1995
Richard N. Cooper

Douglas D. Drysdale* Director May 26, 1995
Douglas D. Drysdale

Barbara S. Feigin* Director May 26, 1995
Barbara S. Feigin

Theordore D. Nierenberg* Director May 26, 1995
Theordore D. Nierenberg

Walter J. Salmon* Director May 26, 1995
Walter J. Salmon

Mikael Salovaara* Director May 26, 1995
Mikael Salovaara

s/Richard L. Sharp Director May 26, 1995
Richard L. Sharp

Edward Villanueva* Director May 26, 1995
Edward Villanueva

*By: s/Richard L. Sharp
Richard L. Sharp,
Attorney-In-Fact

The original powers of attorney authorizing Richard L. Sharp and Michael T.
Chalifoux, or either of them, to sign this annual report on behalf of certain
directors and officers of the Company are included as exhibit 24.

<PAGE>

Circuit City Stores, Inc.
Annual Report on Form 10-K
INDEX TO EXHIBITS

(3) Articles of Incorporation and Bylaws

(a) Amended and Restated Articles of Incorporation of the
Company, effective January 26, 1990, filed as Exhibit
3(a) to the Company's Annual Report on Form 10-K for the
fiscal year ended February 28, 1993, (File No. 1-5767)
are expressly incorporated herein by this reference.

(b) Articles of Amendment to the Amended and Restated
Articles of Incorporation of the Company effective
February 26, 1993, filed as Exhibit 3(b) to the Company's
Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, (File No. 1-5767) are expressly
incorporated herein by this reference.

(4) Instruments Defining the Rights of Security Holders, Including
Indentures

(a) Rights Agreement dated April 29, 1988, between the
Company and Crestar Bank, as Rights Agent, filed as
Exhibit (2) to the Company's Form 8-A Registration
Statement (File No. 1-5767) filed on May 23, 1988, is
expressly incorporated herein by this reference.

(b) $100,000,000 Credit Agreement dated June 30, 1992,
between the Company; Crestar Bank; NationsBank of
Virginia, N.A.; Bank of America; N.T. & S.A.; and
Signet Bank/Virginia. Pursuant to Item 601(b)(4)(iii)
of Regulation S-K, in lieu of filing a copy of such
agreement, Registrant agrees to furnish a copy of such
agreement to the Commission upon request.

(c) First Amendment to Credit Agreement dated September 14,
1994, to the $100,000,000 Credit Agreement dated June
30, 1992, between the Company; Crestar Bank;
NationsBank of Virginia, N.A.; Bank of America, N.T. &
S.A.; and Signet Bank/Virginia. Pursuant to Item
601(b)(4)(iii) of Regulation S-K, in lieu of filing a
copy of such agreement, Registrant agrees to furnish a
copy of such agreement to the Commission upon request.

(d) $100,000,000 term loan agreement dated July 28, 1994,
between the Company and the Long-Term Credit Bank of
Japan, Limited, as agent. Pursuant to Item
601(b)(4)(iii) of Regulation S-K, in lieu of filing a
copy of such agreement, Registrant agrees to furnish a
copy of such agreement to the Commission upon request.

(10) Material Contracts*

(a) Company's 1988 Stock Incentive Plan, filed as Exhibit
10(c) to the Company's Annual Report on Form 10-K for
the fiscal year ended February 28, 1993, (File No. 1-
5767) is expressly incorporated herein by this
reference.

(b) Amendments to the Company's 1988 Stock Incentive Plan
filed as Exhibit 10(k) to the Company's Annual Report
on Form 10-K for the fiscal year ended February 29,
1990, (File No. 1-5767) is expressly incorporated
herein by this reference.

<PAGE>

(c) Amendment to the Company's 1988 Stock Incentive Plan
filed as Exhibit 4(h) to the Company's Registration
Statement on Form S-8 (Registration No. 33-50144) filed
on July 28, 1992, is expressly incorporated herein by
this reference.

(d) Company's Amended and Restated 1989 Non-Employee
Directors' Stock Option Plan, filed as Exhibit A to the
Company's Definitive Proxy Statement dated May 12,
1995, for the Annual Meeting of Stockholders to be held
on June 13, 1995, is expressly incorporated herein by
this reference.

(e) Company's 1994 Stock Incentive Plan filed as Exhibit 99
to the Company's Registration Statement on Form S-8
(Registration No. 033-56697) filed on December 1, 1994,
is expressly incorporated herein by this reference.

(f) Amendment adopted February 10, 1995, to the Company's 1994
Stock Incentive Plan is filed herewith.

(g) Employment agreement dated June 21, 1983, between the
Company and Alan L. Wurtzel, filed as Exhibit 10(w) to
the Company's Registration Statement on Form S-2
(Registration No. 2-83555), is expressly incorporated
herein by this reference.

(h) Amendment dated September 8, 1983, to employment
agreement dated June 21, 1983, between the Company and
Alan L. Wurtzel, filed as Exhibit 10(h) to the
Company's Annual Report on Form 10-K for the fiscal
year ended February 28, 1993, (File No. 1-5767) is
expressly incorporated herein by this reference.

(i) Amendment dated December 2, 1986, to employment
agreement dated June 21, 1983, between the Company and
Alan L. Wurtzel, filed as Exhibit 10(k) to the
Company's Annual Report on Form 10-K for the fiscal
year ended February 28, 1989, (File No. 1-5767) is
expressly incorporated herein by this reference.

(j) Amendment dated May 24, 1989, to employment agreement
dated June 21, 1983, between the Company and Alan L.
Wurtzel, filed as Exhibit 10(p) to the Company's Annual
Report on Form 10-K for the fiscal year ended February
28, 1990, (File No. 1-5767) is expressly incorporated
herein by this reference.

(k) Amendment dated June 16, 1992, to employment agreement
dated June 21, 1983, between the Company and Alan L.
Wurtzel, filed as Exhibit 10(k) to the Company's Annual
Report on Form 10-K for the fiscal year ended February
28, 1993, (File No. 1-5767) is expressly incorporated
herein by this reference.

(l) Employment agreement between the Company and Richard L.
Sharp dated October 17, 1986, and amendment dated
August 1, 1989, to the employment agreement, filed as
Exhibit 10(m) to the Company's Annual Report on Form
10-K for the fiscal year ended February 28, 1993, (File
No. 1-5767) is expressly incorporated herein by this
reference.

(m) Employment agreement dated June 1, 1988, between the
Company and John A. Fitzsimmons, filed as Exhibit 10(n)
to the Company's Annual Report on Form 10-K for the
fiscal year ended February 28, 1989, (File No. 1-5767)
is expressly incorporated herein by this reference.

<PAGE>

(n) Amendment dated August 1, 1989, to employment agreement
dated June 1, 1988, between the Company and John A.
Fitzsimmons, filed as Exhibit 10(o) to the Company's
Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, (File No. 1-5767) is expressly
incorporated herein by this reference.

(o) Employment agreement dated June 1, 1988, between the
Company and Walter Bruckart, filed as Exhibit 10(o) to
the Company's Annual Report on Form 10-K for the fiscal
year ended February 28, 1989, (File No. 1-5767) is
expressly incorporated herein by this reference.

(p) Amendment dated August 1, 1989, to employment agreement
dated June 1, 1988, between the Company and Walter
Bruckart, filed as Exhibit 10(q) to the Company's
Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, (File No. 1-5767) is expressly
incorporated herein by this reference.

(q) Amendment dated March 8, 1995, to employment agreement dated
June 1, 1988, between the Company and Walter Bruckart is
filed herewith.

(r) Employment agreement dated May 25, 1989, between the
Company and Michael T. Chalifoux, filed as Exhibit
10(x) to the Company's Annual Report on Form 10-K for
the fiscal year ended February 28, 1991, (File No. 1-
5767) is expressly incorporated herein by this
reference.

(s) Amended and restated employment agreement dated May 12, 1995,
between the Company and Richard S. Birnbaum is filed
herewith.

(t) Company's Annual Performance-Based Bonus Plan filed as
Exhibit B to the Company's Definitive Proxy Statement
dated May 13, 1994, for the Annual Meeting of
Stockholders held on June 14, 1994, (File No. 1-5767)
is expressly incorporated herein by this reference.

(13) Annual Report to Stockholders

(21) Subsidiaries of the Company

(23) Consents of Experts and Counsel

Consent of KPMG Peat Marwick LLP to Incorporation by Reference of
Independent Auditors' Reports into the Company's Registration
Statements on Form S-8.

(24) Powers of Attorney

(27) Financial Data Schedule

* All contracts listed under Exhibit 10 are management contracts,
compensatory plans or arrangements of the Company required to be filed
as an exhibit.

<PAGE>

S-1

Schedule II

CIRCUIT CITY STORES, INC. AND SUBSIDIARIES

Valuation and Qualifying Accounts and Reserves
(Amounts in thousands)

<TABLE>
Balance at Charged Charge-offs Balance at
Beginning to less End of
Description of Year Income Recoveries Year
<S> <C> <C> <C> <C>
Reserves deducted from
assets to which they apply:

Year ended February 28, 1993:
Allowance for doubtful accounts $3,331 $2,498 $ (580) $5,249

Year ended February 28, 1994:
Allowance for doubtful accounts $5,249 $4,604 $(3,002) $6,851

Year ended February 28, 1995:
Allowance for doubtful accounts $6,851 $1,292 $(1,406) $6,737

</TABLE>

<PAGE>

S-2

Independent Auditors' Report on Financial Statement Schedule

The Board of Directors
Circuit City Stores, Inc.:

Under date of April 5, 1995, we reported on the consolidated balance sheets
of Circuit City Stores, Inc. and subsidiaries (the Company) as of February
28, 1995 and 1994, and the related consolidated statements of earnings,
stockholder's equity and cash flows for each of the fiscal years in the
three-year period ended February 28, 1995, as contained in the February 28,
1995 annual report to stockholders. These consolidated financial
statements and our report thereon are incorporated by reference in the
annual report on Form 10-K for the year ended February 28, 1995. In
connection with our audits of the aforementioned consolidated financial
statements, we also have audited the related financial statement schedule
as listed in Item 14(a)2 of this Form 10-K. This financial statement
schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement
schedule based on our audits.

In our opinion, such schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

s/KPMG Peat Marwick LLP

Richmond, Virginia
April 5, 1995

POWER OF ATTORNEY

I hereby appoint Michael T. Chalifoux or Richard L. Sharp my true and
lawful attorney-in-fact to sign on my behalf, as an individual and in the
capacity stated below, the annual report on Form 10-K of Circuit City Stores,
Inc. for its fiscal year ended February 28, 1995 and any amendment with such
attorney-in-fact may be deemed appropriate or necessary.

s/Alan L. Wurtzel
Director

<PAGE>

POWER OF ATTORNEY

s/Richard N. Cooper
Director

<PAGE>

POWER OF ATTORNEY

s/Douglas D. Drysdale
Director

<PAGE>

POWER OF ATTORNEY

s/Barbara S. Feigin
Director

<PAGE>

POWER OF ATTORNEY

s/Theodore D. Nierenberg
Director

<PAGE>

POWER OF ATTORNEY

s/Mikael Salovaara
Director

<PAGE>

POWER OF ATTORNEY

s/Walter J. Salmon
Director

<PAGE>

POWER OF ATTORNEY

s/Edward Villanueva
Director

<PAGE>

POWER OF ATTORNEY

I hereby appoint Richard L. Sharp my true and lawful attorney-in-fact to
sign on my behalf, as an individual and in the capacity stated below, the
annual report on Form 10-K of Circuit City Stores, Inc. for its fiscal year
ended February 28, 1995 and any amendment with such attorney-in-fact may be
deemed appropriate or necessary.

s/Michael T. Chalifoux
Michael T. Chalifoux, Chief
Financial Officer and Director

<PAGE>

POWER OF ATTORNEY

I hereby appoint Michael T. Chalifoux my true and lawful attorney-in-
fact to sign on my behalf, as an individual and in the capacity stated below,
the annual report on Form 10-K of Circuit City Stores, Inc. for its fiscal
year ended February 28, 1995 and any amendment with such attorney-in-fact may
be deemed appropriate or necessary.

s/Richard L. Sharp
Richard L. Sharp, Chief
Executive Office and Director

CIRCUIT CITY STORES, INC.

B Y - L A W S

As Amended and Restated as of April 12, 1995

OFFICES RECORDS

1. Place 32. Form of Stock Certificate
33. Lost Certificates
STOCKHOLDERS MEETINGS 34. Transfer of Stock
35. Registered Stockholders
2. Place of Meeting
3. Annual Meetings OTHER MATTERS
4. Special Meetings
5. Notices 36. Notices
6. Adjourned Meetings 37. Registered Office and
7. Voting Agent
8. Stockholders Entitled 38. Corporate Records
to Vote 39. Request for Financial
9. Quorum Statement
40. Voting Stock in Other
DIRECTORS Corporations
41. Seal
10. Responsibility of Directors 42. Amendment of By-Laws
11. Number of Directors 43. Fiscal Year
12. (a) Directors' Nominations 44. General
(b) Directors' Terms
13. Directors' Meetings
14. Notice of Meetings
15. Compensation
16. Director Emeritus
17. Executive Committee
18. Audit Committee
19. Compensation and Personnel Committee
20. Nominating and Structure Committee
21. Other Committees

OFFICERS

22. Officers
23. Election of Officers
24. Chairman of the Board
(a) Vice Chairman of the Board
25. President
26. Vice Presidents
27. Secretary
28. Assistant Secretary
29. Treasurer
30. Other Officers
31. Compensation

<PAGE>

CIRCUIT CITY STORES, INC.

B Y - L A W S

OFFICES

1. PLACE: The principal office of the Corporation shall be in the County of
Henrico, State of Virginia.

STOCKHOLDERS

2. PLACE OF MEETING: Meetings of the stockholders shall be held at the
principal office of the Corporation or at such other place which shall be
approved by the Board of Directors and designated in the notice of the
meeting. Meetings may be held either within or without the State of
Virginia.

3. ANNUAL MEETING: Commencing with the year 1979, the annual meeting of the
stockholders of the Corporation shall be held on the third Wednesday in June
of each year, or at such other time and place which shall be approved by the
Board of Directors and designated in the notice of meeting. Such meetings
may be held either within or without the State of Virginia. At the annual
meeting the stockholders shall elect a Board of Directors and transact such
other business as may properly be brought before them.

4. SPECIAL MEETINGS: Special meetings of the stockholders may be called by
the Board of Directors, the Chairman of the Board and the President of the
Corporation.

5. NOTICES: Written notice by mail shall be given in accordance with
Section 36, stating the place, date and hour of a meeting of stockholders
and, in case of a special meeting, the purpose or purposes for which the
meeting is called, shall be given to each stockholder of record entitled to
vote at the meeting not less than ten (10) nor more than fifty (50) days
before the date of the meeting, by or at the direction of the President, the
Secretary, or the officer or persons calling the meeting. The notice shall
be deemed to be given when it is deposited with postage prepaid in the United
States mail addressed to the stockholder at the address as it appears on the
stock transfer books of the Corporation. Notice of a meeting to act on an
amendment of the Articles of Incorporation or on reduction of stated capital
or on a plan of merger, consolidation or exchange shall be given in the
manner provided above not less than twenty-five (25) nor more than fifty (50)
days before the date of the meeting. Such notice shall be

<PAGE>

accompanied by a copy of the proposed amendment or plan of reduction or
merger, consolidation or exchange.

6. ADJOURNED MEETINGS: If a meeting is adjourned for lack of a quorum, any
matter which might have properly come before the original meeting may came
before the adjourned meeting when reconvened.

7. VOTING: Each share of stock shall have one vote on all matters on which
stockholders are entitled to vote. A stockholder may vote either in person
or by proxy executed in writing by the stockholder or a duly authorized
attorney-in-fact.

8. STOCKHOLDERS ENTITLED TO VOTE: In lieu of closing the stock transfer
books, the Board of Directors shall fix a date which is not more than fifty
(50) days in advance of the date on which the particular action is to be
taken as the record date for any such determination of stockholders.

9. QUORUM: A majority of the shares entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of stockholders.
Treasury shares and shares held by a corporation of which the Corporation
owns a majority of the shares entitled to vote for the directors thereof
shall not be entitled to vote or to be counted in determining the total
number of outstanding shares entitled to vote. If a quorum is present,
action on a matter, other than the election of directors, is approved if the
votes cast favoring the action exceed the votes cast opposing the action. In
the election of directors, those receiving the greatest number of votes shall
be deemed elected even though not receiving a majority. At each election for
directors, every stockholder entitled to vote shall have the right to vote
the number of shares owned by him for as many persons as there are directors
to be elected at that time and for whose election he has a right to vote.

DIRECTORS

10. RESPONSIBILITY OF DIRECTORS: The affairs and business of the
Corporation shall be under the management of its Board of Directors and such
officers and agents as the Board of Directors may elect and employ.

11. NUMBER OF DIRECTORS: Effective from April 12, 1995 until the 1995
annual meeting of stockholders, the number of directors shall be ten (10).
Effective at the 1995 annual meeting of stockholders, the number of directors
shall be nine (9). Except as provided in Section 12(b), directors shall be
elected at the annual meeting of stockholders or at a special meeting of the
stockholders called for such a purpose. The number of directors may be
increased or

<PAGE>

decreased from time to time by amendment to these by-laws to the extent
permitted by law and by the Corporation's Articles of Incorporation. They
shall be elected by the stockholders for terms of three (3) years in the
manner set forth in the Articles of Incorporation and shall serve until the
election of their successors.

12. (a) DIRECTORS' NOMINATIONS: Nominations for the election of directors
may be made by the Board of Directors or by any stockholder entitled to vote
in the election of directors generally. However, any stockholder entitled to
vote in the election of directors generally may nominate one or more persons
for election as directors at a meeting only if written notice of such
stockholder's intent to make such nomination or nominations has been given,
either by personal delivery or by United States mail, postage prepaid, to the
Secretary of the Corporation not later than (i) with respect to an election
to be held at an annual meeting of stockholders (other than the 1986 annual
meeting), 120 days in advance of such meeting, (ii) with respect to an
election to be held at the 1986 annual meeting, March 1, 1986 and (iii) with
respect to a special meeting of stockholders for the election of directors,
the close of business on the seventh day following the date on which notice
of such meeting is first given to stockholders.

Each such notice shall set forth: (a) the name and address of the
stockholder who intends to make the nomination and of the person or persons
to be nominated; (b) a representation that the stockholder is a holder of
record of stock of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to nominate the person
or persons specified in the notice; (c) a description of all arrangements or
understandings between the stockholder and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination
or nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder as would be
required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission, had the nominee been
nominated, or intended to be nominated, by the Board of Directors; and (e)
the consent of each nominee to serve as a director of the Corporation if so
elected. The Chairman may refuse to acknowledge the nomination of any person
not made in compliance with the foregoing procedure.

12. (b) DIRECTORS' TERM: No decrease in the number of directors shall have
the effect of changing the term of any incumbent director. Unless a director
resigns or is removed by the majority vote of the stockholders, every
director shall hold office for the term elected or until a successor shall
have been elected. Any

<PAGE>

vacancy occurring in the Board of Directors may be filled by the affirmative
vote of a majority of the remaining directors though less than a quorum of
the Board of Directors; provided, however, that the aggregate number of
vacancies resulting from increases in the number of directors which may be
created and filled by action of the Board of Directors between annual
meetings of stockholders shall be limited to two. The act of the majority of
the directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors.

13. DIRECTORS' MEETING: The annual meeting of the directors shall be held
immediately after the annual meeting of the stockholders. The Board of
Directors, as soon as may be convenient after the annual meeting of the
stockholders at which such directors are elected, shall elect from their
number a Chief Executive Officer (CEO) who shall be the Chairman of the Board
or the President, as the Board shall designate. Special meetings may be
called by the CEO, the Board of Directors or any two directors by giving
notice of the time and place in accordance with Section 14. Special meetings
of the Board of Directors (or any committee of the Board) may be held by
telephone or similar communication equipment whereby all persons
participating in the meeting can hear each other, at such time as my be
prescribed, upon call of the CEO or any two members of the Board. A quorum
shall be a majority of the directors. Action may be taken by the directors
or a committee of the Board of Directors without a meeting if a written
consent, setting forth the action, shall be signed by all of the directors or
committee members either before or after such action. Such consent shall
have the same force and effect as a unanimous vote.

14. NOTICE OF MEETING: At the annual meeting of the Board of Directors each
year and at any meeting thereafter, the Board shall designate the dates,
times and places of regular meetings of the Board for the ensuing calendar
year, and no notice of any kind need be given thereafter with respect to such
regular meetings. Notice of any special meeting of the Board shall be by
oral, telegraphic or written notice duly given to each director not less than
five (5) days before the date of the proposed meeting, but a waiver of notice
of such meeting in writing, signed by a director of the Corporation before or
after the time stated in such notice, shall be equivalent to the giving of
such notice. Attendance at a meeting shall be deemed a waiver of notice of
such meeting, unless the sole purpose of attending the meeting shall be to
object to the transaction of any business.

15. COMPENSATION: Directors shall not receive a stated salary for their
services, but directors may be paid a fixed sum and expenses for attendance
at any regular or special meeting of the Board of Directors or any meeting of
any Committee and such other compensation as the Board of Directors shall
determine. A director

<PAGE>

may serve or be employed by the Corporation in any other capacity and receive
compensation thereafter.

16. DIRECTOR EMERITUS: The Board may appoint to the position of Director
Emeritus any retiring director who has served not less than three years as a
director of the Corporation. Such person so appointed shall have the title
of "Director Emeritus" and shall be entitled to receive notice of, and to
attend all meetings of the Board, but shall not in fact be a director, shall
not be entitled to vote, shall not be counted in determining a quorum of the
Board and shall not have any of the duties or liabilities of a director under
law.

17. EXECUTIVE COMMITTEE: With the approval of a majority of the whole Board
of Directors, two or more directors may be designated to constitute an
Executive Committee. The Executive Committee may exercise all corporate
powers of the Corporation and manage its business and affairs to the same
extent as the Board of Directors, subject to the limitations set forth in
Section 13.1-689 of the Virginia Stock Corporation Act and any successor
legislation thereto. The Board of Directors may at any time, by resolution,
limit the powers of the Executive Committee. The Executive Committee may
meet at scheduled times or, upon notice to each member, hold a special
meeting. The Executive Committee shall keep minutes of its meetings.
Vacancies in the membership of the Executive Committee shall be filled by the
Board of Directors.

18. AUDIT COMMITTEE: The Board of Directors shall appoint each year an Audit
Committee, composed exclusively of outside directors, which shall perform
such duties as they consider necessary and desirable to properly evaluate and
generally supervise the Corporation's accounting procedures including but not
limited to the following:

1. Recommend outside auditors to the Board.

2. Determine that the scope of the audit is adequate and approve the
audit fee.

3. Review audit results with the outside auditors.

4. Review and approve the retention of the outside auditors to perform
non-audit services and approve the fee therefor.

5. Recommend policy for the scope, frequency, and method of internal
audit reports and review the results thereof. Develop a direct
line of communication with internal auditors, if and when such are
employed.

<PAGE>

6. Review all filings with the Securities and Exchange Commission.

7. Review pending lawsuits.

8. Review insurance coverage.

The Audit Committee should develop and follow a comprehensive checklist so as
to ensure that the Committee's inquiries of the outside auditors and
management are systematic in scope. This Committee shall have free access to
the outside auditors and to the Corporation's general counsel. Meetings of
the Committee should be scheduled not less than three times each year, with
a portion of each meeting being held without management representatives
present. Minutes of such meetings should be kept and reports made to the
entire Board of Directors.

19. COMPENSATION AND PERSONNEL COMMITTEE: The Board of Directors shall
appoint each year a Compensation and Personnel Committee, which shall be
composed of three outside directors, and shall have the following duties:

1. Review and recommend to the Board current management compensation
programs including salaries, bonuses and fringe benefits and the
creation of new officerships.

2. Review and report to the Board on the funding and adequacy of
existing retirement programs, and recommend new programs, if
appropriate. (This responsibility does not include investment
policy and other responsibilities of the Trustees of the Profit
Sharing Fund.)

3. Award and administer pursuant to existing authority, the
Corporation's Stock Option and Performance Share Programs and
review and recommend similar future programs, if any.

4. Review top management organization, assist the CEO in determining
that the Corporation has adequate depth and breadth of management
to carry out its expansion programs and to provide for succession
in the event of retirement or the unanticipated departure of a key
executive.

5. Review the Corporation's programs for attracting, developing and
compensating management personnel at lower and middle levels.

20. NOMINATING AND STRUCTURE COMMITTEE: The Board of Directors shall
appoint each year a Nominating and Structure Committee, which shall be
composed of at least three members of the Board. A

<PAGE>

majority of the members of the Nominating and Structure Committee shall be
outside directors. The functions of this Committee shall include the
following:

1. Review the performance and contribution of existing directors for
the purpose of recommending whether they be nominated for a
successive term.

2. Recommend policies with regard to the size, composition and
function of the Board.

3. Suggest persons to fill vacancies on the Board and maintain files
on names submitted.

4. Assist the Chairman of the Board in carrying out an orientation
program for new directors.

5. Review and recommend to the Board changes and improvements in the
functioning of the Board.

6. Review and recommend compensation levels for outside directors.

21. OTHER COMMITTEES: The Board of Directors may designate such other
committees as it deems advisable. Each committee shall consist of at least
two (2) directors and, to the extent provided by the resolution of the Board
of Directors, shall have and exercise such powers of the Board of Directors
in the management of the business and affairs of the Corporation as may be
lawfully delegated.

OFFICERS

22. OFFICERS: The officers of the Corporation shall be a President, a
Secretary and a Treasurer, each of whom shall be elected by the Board of
Directors. In addition, the Board of Directors may elect or the President,
if so authorized by the Board of Directors, may appoint one or more Vice
Presidents and other officers or assistant officers as may be deemed
necessary or advisable to carry on the business of the Corporation. The
President shall be a member of the Board of Directors. Any two offices may
be combined in the same person except the offices of President and Secretary.

23. ELECTION AND REMOVAL OF OFFICERS, TERM: Officers shall be elected at
the annual meeting of the Board of Directors immediately following the annual
meeting of stockholders or appointed at the time thereof, and may be elected
or appointed at such other time or times as the Board of Directors or the
persons authorized to make

<PAGE>

appointments shall determine. All officers shall hold office, unless
removed, until the time of the next annual meeting of the Board of Directors
or until their successors are elected. Any officer may resign at any time
upon written notice to the President or the Board of Directors, and such
resignation shall be effective when notice is delivered unless the notice
specifies a later effective date. Elected officers may be removed, with or
without cause, at any time by the Board of Directors. Appointed officers may
be similarly removed by the persons having the authority to appoint them or
by the Board of Directors.

24. CHAIRMAN OF THE BOARD: The Chairman of the Board, if one is designated
by the Board of Directors, shall preside at all meetings of the Board and of
stockholders and perform such other duties as the Board shall assign from
time to time.

(a) VICE CHAIRMAN OF THE BOARD: The Vice Chairman of the Board, if one
is designated by the Board of Directors, shall at the request of or in the
absence of the Chairman of the Board, preside at meetings of the Board and of
stockholders and, when requested to do so, by the Board, shall perform all of
the functions of the Chairman of the Board during the absence or incapacity
of the latter.

25. PRESIDENT: The President, in the absence of the Chairman of the Board
and the Vice Chairman of the Board, shall preside at all meetings of the
Board of Directors and stockholders, shall have power to call special
meetings of the stockholders and directors for any purpose; may hire, appoint
and discharge, subject to the approval of the Board of Directors, employees
and agents of the Corporation and fix their compensation; may make and sign
deeds, mortgages, deeds of trust, notes, leases, contracts and agreements in
the name and on behalf of the Corporation; shall have power to carry into
effect all directions of the Board of Directors; and shall have general
supervision of the business of the Corporation; and shall have general
supervision of the business of the Corporation, except as may be limited by
the Board of Directors, the Articles of Incorporation, or these bylaws.

26. VICE PRESIDENT: Such Vice Presidents, in the order designated by the
Board of Directors from time to time, shall exercise all of the functions of
the President during the absence or incapacity of the latter.

27. SECRETARY: The Secretary shall be the ex-officio clerk of the Board of
Directors and shall give, or cause to be given, notices of all meetings of
stockholders and directors, and all other notices required by law or by these
by-laws. The Secretary shall record the proceedings of the meetings of the
stockholders and directors in a book kept for that purpose and shall keep the
seal of the

<PAGE>

Corporation and attach it to all documents requiring such impression unless
some other officer is designated to do so by the Board of Directors. The
Secretary shall also perform such other duties as may be assigned by the
Board of Directors.

28. ASSISTANT SECRETARY: There may be one or more Assistant Secretaries who
shall exercise all of the functions of the Secretary during the absence or
incapacity of the latter and such other duties as may be assigned from time
to time by the Board of Directors.

29. TREASURER: The Treasurer shall keep or cause to be kept full and
accurate books of account, and may make and sign deeds, mortgages, deeds of
trust, notes, leases, contracts and agreements in the name and on behalf of
the Corporation. Whenever required by the Board of Directors or the
President, the Treasurer shall render a financial statement showing all
transactions of the Treasurer and the financial condition of the Corporation.

30. OTHER OFFICERS: There may be one or more Assistant Vice Presidents,
Assistant Treasurers, Controller or Assistant Controllers, who shall perform
such duties as may be assigned from time to time by the Board of Directors.

31. COMPENSATION: The compensation of all officers of the Corporation shall
be fixed by the Board of Directors.

RECORDS

32. FORM OF STOCK CERTIFICATE: The certificates of stock of the Corporation
shall be numbered and entered in the books of the Corporation as they are
issued. They shall be signed manually or by the use of a facsimile
signature, by the Chairman of the Board, by the President or a Vice President
designated by the Board of Directors and countersigned by the Secretary or an
Assistant Secretary. They shall bear the corporate seal or a facsimile
thereof. The Board of Directors of the Corporation may issue scrip in
registered or bearer form, which shall entitle the holder to receive a
certificate for a full share. Scrip shall not entitle the holder to exercise
voting rights or to receive dividends thereon or to participate in any of the
assets of the Corporation in the event of liquidation. The Board may cause
scrip to be issued subject to the condition that it shall become void if not
exchanged for certificates representing full shares before a specified date
or subject to any other conditions that it may deem advisable. No fractional
shares shall be issued.

33. LOST CERTIFICATES: The President or Secretary may direct a new
certificate or certificates to be issued in place of any lost

<PAGE>

or destroyed certificate or certificates previously issued by the Corporation
if the person or persons who claim the certificate or certificates make an
affidavit stating the certificates of stock have been lost or destroyed.
When authorizing the issuance of a new certificate or certificates, the
Corporation may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost or destroyed certificate or
certificates, or the legal representative, to advertise the same in such
manner as the Corporation shall require and/or to give the Corporation a
bond, in such sum as the Corporation may direct, to indemnify the Corporation
with respect to the certificate or certificates alleged to have been lost or
destroyed.

34. TRANSFER OF STOCK: Upon surrender to the Corporation, or to the
Transfer Agent of the Corporation, if any, of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, the Corporation shall issue a new certificate to the
person entitled thereto, cancel the old certificate, and record the
transaction upon its books.

35. REGISTERED STOCKHOLDERS: The Corporation shall be entitled to treat the
holder of record of any share or shares of stock as the owner thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person. The
Corporation shall not be liable for registering any transfer of shares which
are registered in the name of a fiduciary unless done with actual knowledge
of facts which would cause the Corporation's action in registering the
transfer to amount to bad faith.

OTHER MATTERS

36. NOTICES: Each stockholder, director and officer shall furnish in
writing to the Secretary of the Corporation the address to which notices of
every kind may be delivered or mailed. If such person fails to furnish an
address, and the Post Office advises the Corporation that the address
furnished is no longer the correct address, the Corporation shall not be
required to deliver or mail any notice to such person. Whenever notice is
required by applicable law, the Articles of Incorporation or these by-laws,
a written waiver of such notice signed before or after the time stated in the
waiver or, in the case of a meeting, the attendance of a stockholder or
director (except for the sole purpose of objecting) or, in the case of a
unanimous consent, the signing of the consent, shall be deemed a waiver of
notice.

37. REGISTERED OFFICE AND AGENT: The Corporation shall at all times have a
registered office and a registered agent.

<PAGE>

38. CORPORATE RECORDS: The Corporation shall keep correct and complete
books and records of accounts and minutes of the stockholders' and directors'
meetings, and shall keep at its registered office or principal place of
business, or at the office of its transfer agent, if any, a record of its
stockholders, including the names and addresses of all stockholders and the
number, class, and series of the shares held by each. Any person who shall
have been a stockholder of record for at least six months immediately
preceding demand, or who shall be the holder of record of at least five
percent (5%) of all the outstanding shares of the Corporation, upon written
request stating the purpose therefor, shall have the right to examine, in
person or by agent or attorney, at any reasonable time or times, for any
proper purpose, the books and records of account of the Corporation, minutes
and record of stockholders, and to make copies or extracts therefrom.

39. REQUEST FOR FINANCIAL STATEMENT: Upon the written request of any
stockholder, the Corporation shall mail to the stockholder its most recent
published financial statement.

40. VOTING STOCK IN OTHER CORPORATIONS: Unless otherwise provided by the
Board of Directors, the President, in the name and on behalf of the
Corporation, may appoint from time to time himself or any other person (or
persons) proxy, attorney or agent for the Corporation to cast the votes which
the Corporation may be entitled to cast as a stockholder or otherwise in any
other corporation, domestic or foreign, whose stock or securities are held by
the Corporation, or to consent in writing to any action by such other
corporation, or to exercise any or all other powers of this Corporation as
the holder of the stock or other securities of such other corporation. The
President may instruct the person or persons so appointed as to the manner of
casting such votes or giving such consent and may execute or cause to be
executed on behalf of the Corporation and under its corporate seal such
written proxies, consents, waivers, or other instruments as may be deemed
necessary or proper. The President may attend any meeting of the holders of
stock or other securities of any such other corporation and vote or exercise
any or all other powers of this corporation as the holder of the stock or
other securities of such other corporation.

41. SEAL: The seal of the Corporation shall be a flat faced circular die
containing the word "SEAL" in the center and the name of the Corporation
around the circumference.

42. AMENDMENT OF BY-LAWS: The power to alter, amend or repeal the by-laws
or adopt new by-laws shall be vested in the Board of Directors unless
otherwise provided in the Articles of Incorporation. By-laws adopted by the
Board of Directors may be

<PAGE>

repealed or changed or new by-laws adopted by the stockholders, and the
stockholders may prescribe that any by-law adopted by them may not be
altered, amended or repealed by the Board of Directors.

43. FISCAL YEAR: The fiscal year of the Corporation shall end on the last
day of February in each year.

44. GENERAL: Any matters not specifically covered by these by-laws shall be
governed by the applicable provisions of the Code of Virginia in force at the
time.

EXHIBIT 21

CIRCUIT CITY STORES, INC.

Subsidiaries of the Company

Jurisdiction of
Incorporation
Subsidiary or Organization

Acme Commercial Corporation Virginia

CC Distribution Company of Virginia, Inc. Virginia

Circuit City Stores West Coast, Inc. California

First North American National Bank National Bank
Located in Georgia

Northern National Insurance Ltd. Bermuda

Patapsco Designs, Inc. Maryland

EXHIBIT 23

Consent of Independent Auditors

The Board of Directors
Circuit City Stores, Inc.:

We consent to incorporation by reference in the registration statements
(Numbers 33-56697, 33-53185, 33-50144, 33-36650 and 33-22874) on Form S-8
of Circuit City Stores, Inc. of our report dated April 5, 1995, relating to
the consolidated balance sheets of Circuit City Stores, Inc. and
subsidiaries (the Company) as of February 28, 1995 and 1994, and the
related consolidated statements of earnings, stockholders' equity and cash
flows for each of the fiscal years in the three-year period ended February
28, 1995, which report is incorporated by reference from the annual report
to stockholders in the February 28, 1995 annual report on Form 10-K of
Circuit City Stores, Inc. We also consent to the incorporation by
reference in the foregoing registration statements of our report dated
April 5, 1995, relating to the financial statement schedule of Circuit City
Stores, Inc., which report appears as listed in Item 14(a)2 of this Form
10-K.

s/KPMG Peat Marwick LLP

Richmond, Virginia
May 19, 1995

March 8, 1995

Mr. Walter Bruckart
10813 Cherry Hill Drive
Richmond, VA 23060

Dear Mr. Bruckart:

This letter agreement will confirm our understanding effective March
1, 1995 concerning certain changes in the terms and conditions of the
Employment Agreement entered into on June 1, 1988 by and between Circuit
City Stores, Inc. (the "Company") and you (the "Employee"), as amended by
letter agreement dated August 1, 1989 (the "Employment Agreement" or the
"Agreement"). The changes are as follows:

Article I: - Delete the present text of this section and substitute
the following:

Effective March 1, 1995, the Employee shall begin a new
phase of his employment with the Company. During each year of
the new phase, the Employee agrees to devote his time to the
performance of such duties as may be assigned to him from time to
time by the Company's Board or Chief Executive Officer. The
Employee's title during this phase shall be "Consultant."

Article II: - Delete the present text of this section and substitute
the following:

Effective March 1, 1995, the term of this Agreement shall be
five years. The Agreement shall expire upon February 29, 2000
and may be terminated prior to its expiration by either the
Company or the Employee. The consequences of such a termination
are described in other provisions of this Agreement.

Article III: - Delete the present text of this section and
substitute the following:

Effective March 1, 1995, the Employee's compensation shall
be:

<PAGE>

Mr. Walter Bruckart
Page 2
March 8, 1995

(1) Base salary of $200,000.00 per year.

(2) Participation in the Company's insurance plans and
the Company's fringe benefit and executive
compensation programs for senior management in
accordance with the terms and provisions of those
plans and programs, as they may be in effect from
time to time; except, however, that the Employee
shall not:

(a) receive any new grants under
the Company's stock incentive programs.

(b) be eligible for the fiscal
year bonus program after FY 1995.

(d) be eligible for Long Term
Disability insurance.

In addition, during the term of this Agreement the
Company shall reimburse the Employee for all reasonable and
necessary expenses incurred by the Employee in connection with
the performance of his duties hereunder in accordance with
corporate policies and procedures covering travel and business
expense reimbursement, as they may be in effect from time to
time.

Article VI(2): - Delete the present text of this section and
substitute the following:

(2) Without Cause. The Company may terminate the Employee's
employment at any time prior to the expiration of this Agreement
without cause ("cause being defined in Article VI(1)). In the event
that after March 1, 1995: (a) the Employee's employment is terminated
by the Company without cause; (b) the Employee resigns at the
Company's request at a time when no cause for termination exists; or
(c) the Employee voluntarily terminates his employment as a result of
a reduction in compensation or benefits (which is not part of a
prorata reduction in executive compensation or benefits for the
Company's senior executives) or as a result of a significant reduction
in the Employee's responsibilities, and the voluntary termination
occurs

<PAGE>

Mr. Walter Bruckart
Page 3
March 8, 1995

within 60 days after such reduction, the Employee shall forfeit the
right to any compensation (other than deferred compensation) under
this Agreement after the date of termination except:

(i) The Employee shall continue to receive the base
salary provided for in Article II of this Agreement until
the date this Agreement would have expired had the
termination not occurred; and

(ii) Participation in the Company's insurance plans for
12 months after employment terminates to the extent
permitted by the provisions of such plans, except as
modified by Article III (2) above.

Article VI(3): - Delete the present text of this section and
substitute the following:

(3) Death or Disability. If the Employee dies or
becomes disabled during the term of this Agreement, the
Employee's employment may be terminated by the Company. In such
event, neither of Article VI(1) or (2) shall be applicable. The
determination as to whether the Employee has suffered a
disability and the date on which the disability commenced shall
be made by the Committee, in its sole discretion, on the basis of
competent evidence. In the event of termination because of
disability or death, the Employee or the designated beneficiary
of the Employee in the case of death, shall continue to receive
the base salary provided for in Article II until the date when
this Agreement would have expired had the termination not
occurred. Any amounts the Employee receives under insurance or
other programs (other than life insurance) provided by the
Company in which the Employee may be a participant during such
period of time shall be an offset to amounts which he would
otherwise receive under this Article VI(3).

Article VII(2): - Delete the present text of this section and
substitute the following:

(2) Voluntary Termination Following a Change in
Control. The provisions of Article VII(1) notwithstanding, in
the event that a Change in Control (as hereinafter defined)
occurs and within one year

<PAGE>

Mr. Walter Bruckart
Page 4
March 8, 1995

thereafter the Employee voluntarily terminates his
employment (other than pursuant to provision (c) of Article
VI(2)), the Employee shall be entitled to receive the entire of
base salary which would have been payable to him until the date
of expiration of this Agreement, payable to him over the same
period of time as such payments would have been paid had this
Agreement not been terminated.

Except as provided in this letter, after March 1, 1995, all of the
provisions of the Employment Agreement shall remain in full force and
effect. Until March 1, 1995, the present terms and conditions of the
Employment Agreement shall remain in effect.

Please indicate your agreement and acceptance of the above by signing
and returning a copy of this letter.

CIRCUIT CITY STORES, INC.

s/Richard L. Sharp

Richard L. Sharp
Chairman, President and CEO

ACCEPTED AND AGREED:

s/Walter Bruckart March 9, 1995
Walter Bruckart Date

EMPLOYMENT AGREEMENT

THIS AGREEMENT is made as of May 12, 1995, by and between CIRCUIT CITY
STORES, INC., (the "Company"), a Virginia Corporation, and Richard S.
Birnbaum, (the "Employee").

The parties agree as follows:

ARTICLE I

Services

The Company agrees to employ the Employee as Executive Vice President
during the term of this Agreement. The Employee agrees to devote his full
time and attention to the business of the Company and to the faithful
performance of his duties as Executive Vice President and to the performance
of such additional duties as may be assigned to him from time to time by the
Company's Board of Directors (the "Board") or Chief Executive Officer.

At any time and from time to time while this agreement is in force, the
Employee may be appointed to such other executive positions and be given such
other titles and executive responsibilities as the Board may determine.

ARTICLE II

Term

The Company agrees to employ the Employee and the Employee agrees to
serve the Company for a term beginning as of May 12, 1995 and continuing
through May 11, 1997. The term of this Agreement shall be automatically
extended for additional one-year periods unless either party notifies the
other in writing at least one year before the end of the then-current term
that it does not wish to extend the term. For example, if such a notice is
not given by May 12, 1996, the term of this Agreement shall extend through
May 11, 1998. However, in order for the contract to expire on that date,
notice must be given by May 12, 1997. If no such notice is given, the term
shall extend through May 11, 1999. This Agreement may be terminated prior to
its expiration by either the Company or the Employee. The consequences of
such a termination are described in other provisions of this Agreement.

<PAGE>

ARTICLE III

Compensation

The Employee's compensation shall include:

(1) Base salary, as determined by the Board or the
Compensation and Personnel Committee of the Board (the
"Committee") following an annual review of the Employee's
compensation. Until June 1, 1995, such base salary will be
$475,000.00/annually.

(2) Cash bonuses in accordance with the Company's
annual bonus program established by the Board or the Committee
and on a basis no less favorable than that applicable to other
senior management employees and such other cash bonuses as the
Board or the Committee, in their discretion, may determine from
time to time.

(3) Participation in the Company's stock incentive
programs to the extent the Board or the Committee, in their
discretion determines is appropriate for senior management
employees.

(4) Participation in the Company's pension and other
benefit plans and all of the Company's fringe benefit and
executive compensation programs for senior management employees
not otherwise provided for in this Agreement in accordance with
the terms and provisions of those plans and programs, as they
may be in effect from time to time.

In addition, the Company shall reimburse the Employee for all reasonable
and necessary expenses incurred by the Employee in connection with the
performance of his duties hereunder in accordance with corporate policies and
procedures covering travel and business expense reimbursement, as they may be
in effect from time to time.

The Employee may elect to defer all or any part of his salary or bonus
by filing a written election (the "Election") to that effect with the
Secretary of the Company. As to salary, the Election shall be effective only
with respect to compensation for services performed after the Employee files
the Election. As to bonuses, the Election shall be effective only with
respect to bonuses determined and awarded to the Employee after the Employee
files the Election. Any amounts deferred by the Employee will be credited to
an account established for him on the books of the Company. This account
will also be credited

<PAGE>

as of the end of each fiscal year, until such time as no balance remains in
the account, with an additional amount equal to the product of (a) the
average balance credited to the account during that fiscal year and (b) a
percentage which shall be the time weighted average of the prime rate
announced by Signet Bank from time to time during such fiscal year. The
total amount credited to this account will become payable to the Employee
after his termination of employment upon such payment schedule as he may
specify in the Election. If termination of employment occurs by reason of
death, or if the Employee dies after payments have commenced, any remaining
payments will be made to one or more beneficiaries designated by the Employee
in a writing filed with the Secretary of the Company. If the Employee fails
to designate a beneficiary, or if all the designated beneficiaries predecease
him, payment of the remaining unpaid balance in the account will be made to
the Employee's estate. The Company reserves the right to accelerate payments
or to make payment of the amounts remaining unpaid in a lump sum. All
determinations made and actions taken by the Company under this Article shall
be binding upon the beneficiaries and the Employee's estate. The Employee's
rights, or the rights of any beneficiary, are those of a general creditor of
the Company.

ARTICLE IV

Confidential Information

The Employee recognizes that by virtue of his present position and his
tenure with the Company in an executive capacity, he has and will continue to
have access to Company trade secrets and other confidential information in
whatever form as documents, software, C.D. Rom, firmware, brochures, data,
materials, knowledge, graphs, pictures and the like including, but not
limited to, the Company's business methods, expansion strategies, expansion
plans, merchandising and marketing techniques or policies, training
techniques, internal operations, supplier information, pricing information,
internal corporate planning methods, systems and operating procedures and
other business matters (the "Confidential Information").

The Employee recognizes and acknowledges that such Confidential
Information, as may exist from time to time, is a valuable, special and
unique asset of the Company, and that this Confidential Information and its
use have been responsible for the rapid growth and nationwide expansion of
the Company, and if known by an entity engaged in the "Business of the
Company," would cause irreparable harm to the Company. The "Business of the
Company", shall be defined as: (a) retail sales and service of consumer
electronics or appliances (with or without after-sale service) or (b) the
purchase or sale of motor vehicles (with or without providing after-sale
service) or c) any other line of business in which the

<PAGE>

Company becomes engaged before the date the Employee's employment terminates.

Therefore, except in performing his duties as an employee of the
Company, the Employee shall not:

(1) Make or cause to be made any reproductions of
any Confidential Information belonging to or in the possession of the
Company; or

(2) Remove any Confidential Information from the premises
of the Company or fail or refuse to surrender the same to the Company
immediately upon the termination of his employment or at any prior time upon
the Company's request; or

(3) Use for his own benefit or purposes or disclose
to or use for the benefit or purposes of anyone other than the Company,
both during his employment and after the termination of his employment,
any trade secrets or other Confidential Information, whether he learned
the information before or after signing this Agreement.

ARTICLE V

Non-competition and Non-solicitation

(1) Non-competition. Except as hereinafter provided, the Employee
agrees that he will not, without the prior written consent of the Company,
engage in competition with the Company by being associated with any Competing
Business (as hereinafter defined) during the term of this Agreement and for
a period of one year following its termination or expiration. For purposes
of this Article, the Employee will be deemed to have associated with a
Competing Business if he: (1) directly or indirectly, alone or as a member
of a partnership, owns greater that a 5% interest in; or (2) manages,
operates, controls, or acts as a consultant to; or (3) serves as an officer
or director or in any managerial or executive position; with any Competing
Business.

A "Competing Business" is any business entity which engages in the
Business of the Company and engages in Substantial Competition with the
Company in one or more Metropolitan Statistical Areas ("MSA"), in which the
Company has its operation, or in which, at the date the Employee's employment
terminates, the Company is engaged in real estate site selection or has taken
further steps toward the commencement of operation in the future, either
alone or in association with another entity ("Future Statistical Areas"), and
in which the Company collectively produced, or, in the case of Future
Statistical Areas, is projected to produce in the first year of operations,
more than $5 million of gross sales. A

<PAGE>

business will not be considered to be in "Substantial Competition" with the
Company if: (1) the business or the operating unit of the business in which
the Employee is employed or with which the Employee is associated (the
"Business Unit") is not engaged in the Business of the Company; or (2) if
sales of the Business Unit's products or services in the Business of the
Company constitute less than 10% of such Business Unit's sales; or (3) if the
sales of the Business Unit in the Business of the Company do not constitute
more than 10% of the sales of the Business Unit, but there is not significant
geographic overlap between such Business Unit and the Company's business
locations. For the purposes of this provision, there will not be a
significant geographic overlap if less than 10% of the sales of such Business
Unit and less than 10% of the Company's sales (i) are in the same MSA or (ii)
are projected to be in the same MSA within the first year of operations in
the case of Future Statistical Areas. The term "Business of the Company" is
defined in Article IV. In every case, the good faith judgement of the
Committee shall be conclusive as to whether the Employee is associated with
a Competing Business.

(2) Non-solicitation. The Employee agrees that during the term of this
Agreement and for a period of two years following its termination, he will
not, without the prior written consent of the Company, directly or indirectly
engage in efforts to induce the Company's employees to terminate their
employment for the purpose of being employed by another business entity.

(3) Change of Control. In the event that the Employee's employment is
terminated within two years following a Change of Control (Change of Control
being defined in Article VII) under circumstances described in Article VI(2),
the Employee shall not be bound by the provisions of this Article.

ARTICLE VI

Termination by the Company

(1) For Cause. The Company may immediately terminate the Employee's
employment at any time prior to the expiration of this Agreement for "cause".
For purposes of this Agreement, the following shall be "cause" for
termination.

(a) continued and deliberate neglect by the Employee
of his employment duties; or

(b) criminal misconduct of the Employee in
connection with the performance of any of his
duties, including, by way of example but not
limitation, misappropriation of funds or
property of the Company or accepting bribes

<PAGE>

or kickbacks in connection with any transaction
entered into on behalf of the Company; or

(c) failure of the Employee to disclose to the Board
a conflict of interest, of which he knew or,
with reasonable diligence, would have known, in
connection with any transaction entered into on
behalf of the Company; or

(d) conduct by the Employee that would result in
material injury to the reputation of the Company
if he were retained in his position with the
Company; or

(e) the Employee's conviction of a felony; or
(f) a preliminary or permanent injunction or similar
remedy is entered against the Employee, the
Company or both preventing the Employee or the
Company from performing all or part of this
Agreement; or

(g) breach by the Employee of the provisions of
Articles IV or V of this Agreement; or

(h) deliberate actions by the Employee which are
contrary to the best interests of the Company.

In every case, the good faith judgement of the Committee shall be
conclusive as to whether cause for termination exists. In the event of a
termination for cause, which shall include resignation by the Employee at the
Company's request at a time when cause for termination exists, the Employee
shall forfeit the right to any compensation (other than deferred
compensation) under this Agreement after the date of termination, except to
the extent that the terms of any plans or programs referred to in Article III
(4) or any applicable law require otherwise.

(2) Without Cause. The Company may terminate the Employee's employment
agreement at any time prior to the expiration of this Agreement without cause
("cause" being defined in Article VI(1)). In the event: (a) the Employee's
employment is terminated by the Company without cause; (b) the Employee
resigns at the Company's request at a time when no cause for termination
exists; or (c) the Employee voluntarily terminates his employment as a result
of a reduction in compensation or benefits (which is not part of a prorata
reduction in executive compensation or benefits for the Company's senior
executives) or as a result of a significant reduction in the Employee's
responsibilities, and the voluntary termination occurs within 60 days after
such reduction, the Employee shall forfeit the right

<PAGE>

to any compensation (other than deferred compensation) under this Agreement
after the date of termination except:

(i) 12 months of base salary, payable in biweekly
installments over the following 12 months; and, in the
event that the termination of employment occurs within
two years following a Change of Control (Change of
Control being defined in Article VII), an additional 12
months of base salary, payable in biweekly installments
over the second 12-month period immediately following
such termination; and

(ii) a pro-rated bonus for the fiscal year in which the
Employee's employment is terminated, if the termination
occurs on or after September 1st of that fiscal year.
The proration will be based on the number of complete
months the Employee worked in that fiscal year, will be
in accordance with the bonus program for such fiscal
year, and will be payable within two weeks of when
bonuses are distributed, and

(iii) a prorated bonus for the prior fiscal year, if the
Employee worked six or more months in the prior fiscal
year, and if the Employee's termination date is between
March 1st and the date bonuses are distributed for the
prior fiscal year (if bonuses are awarded for the prior
fiscal year). In this event, the bonus will be prorated
for the number of complete months the Employee worked in
the prior fiscal year, and

(iv) Continued participation, as if still employed, in the
Company's medical and dental insurance plans through
the end of the month in which the Employee's severance
payments end to the extent permitted by the provisions
of such plans; provided, however, the Company's
obligation to continue participation in these plans,
ends on the last day of the month in which the Employee
becomes eligible to participate in such benefits at his
new place of employment. However, the Company will
continue to provide benefit continuation to the extent
required by federal law.

Notwithstanding the foregoing, the Employee shall have the obligation to
seek alternative employment following a termination of employment under
Article VI(2). Any remuneration the Employee receives for the performance of
personal services during the year following termination of his employment
pursuant to this Article VI(2) will be an offset to the Company's obligations
to pay the amounts referred to in subparagraph (i) above; provided, however,
that such an offset will not reduce below one-half the remaining biweekly

<PAGE>

payments the Company is obligated to pay under subparagraph (i) above; and
provided, further, that the Employee shall not have any obligation to seek
other employment and no such offset will be allowed the Company if such a
termination of employment occurs within two years following a Change of
Control (Change of Control being defined in Article VII).

(3) Death or Disability. If the Employee dies or becomes disabled
during the term of this Agreement, the Employee's employment will terminate
as of the date of the Employee's death or the determination of the Employee's
disability. In such event, neither of Article VI (1) or (2) shall be
applicable. The determination as to whether the employee has suffered a
disability and the date on which the disability commenced shall be made by
the Committee, in its sole discretion, on the basis of competent evidence;
provided, however, that the inability of the Employee to perform each of the
material duties of his employment for 6 consecutive months because of a
medically determined physical or mental condition shall be conclusive
evidence of disability unless the Company is provided with competent medical
evidence that the condition will not continue to prevent the Employee from
performing his duties for more than six additional months. Two consecutive
weeks of full ability to perform each of the material duties of the position
shall be required to interrupt the running of the six-month period.

In the event of termination because of disability, the Employee shall
receive his base salary (pursuant to Article III (1)) for the first 12 months
after the first date on which the Employee was unable to perform, after which
he shall be entitled only to such amounts, if any, as may be available any
employment-related benefit plans or programs in which the Employee may be a
participant (except those which are totally paid for by the Employee through
a private company). Any amounts the Employee receives under such plans or
programs during the 12 months referred to above shall be an offset to amounts
which he would otherwise receive under Article VI (3).

In the event of the Employee's death, the designated beneficiary of the
Employee shall continue to receive the Employee's base salary for a period of
3 months following his death.

ARTICLE VII

Termination by Employee

(1) General Rule. The Employee may voluntarily terminate his
employment prior to the expiration of this Agreement upon 60 days written
notice to the Company. If the Employee does so for reasons other than those
set forth in provision (c) of Article VI (2) or

<PAGE>

for such reasons, but after the time period set forth in such provision has
expired, he shall forfeit the right to any compensation (other than deferred
compensation) under this Agreement after the date of termination.

(2) Voluntary Termination Following a Change of Control. The provision
of Article VII (1) notwithstanding, in the event that a Change of Control (as
hereinafter defined) occurs and within one year thereafter the Employee
voluntarily terminates his employment (other than pursuant to provision (c)
of Article VI (2)), the Employee shall be entitled to receive, in addition to
any other amounts he may be entitled to receive under this Agreement and
subject to any applicable payroll or other taxes required to be withheld, an
amount equal to one year's base salary, in addition to the continuation of
his medical and dental benefits (as if still employed) during the pay-out
period. This severance amount shall be payable in biweekly installments over
the 12 months immediately following termination.

In such event, fiscal year-end bonuses will be handled in the following
manner:

(i) If the Employee's termination date is on or after
September 1st: any bonus awarded for that year will be
prorated for the number of complete months the Employee
worked in the fiscal year.

(ii) If the termination occurs prior to September 1st, no
bonus will be due.

(iii) If the Employee's termination date is between March 1
and May 15: the Employee shall also be entitled to a
bonus for the prior fiscal year, prorated for the number
of complete months the Employee worked in the prior
fiscal year, provided the number of months employed in
that year was equal to or greater than six.

(3) Change of Control Definition. In this Agreement, "Change of
Control" shall mean:

(i) a third person, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934,
becomes, or obtains the right to become, the beneficial
owner of Company securities having 20% or more of the
combined voting power of the then outstanding securities
of the Company that may be cast for the election of
directors of the Company (other than as a result of an
issuance of securities initiated by the Company in the
ordinary course of business); or

<PAGE>

(ii) as the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination,
sale of assets or contested election, or any combination
of the foregoing transactions, the persons who were
directors of the Company before such transactions shall
cease to constitute a majority of the Board of Directors
of the Company or any successor to the Company.

ARTICLE VIII

Benefits Upon Termination

Upon termination of employment, benefits are terminated as described
below:

1) Medical and Dental Plans: The Employee's participation in the
Medical and/or Dental plans terminates as of the last day of the month in
which the Employee's employment ends, unless specifically continued during a
severance payment period as noted in Article VI or Article VII(2) above.
Continuation of coverage other than as provided in Article VI or Article
VII(2) above, will be available in accordance with federal law and each
plan's provisions.

2) Retirement Plan: The Employee's termination of employment will not
affect Retirement Plan benefits earned as of the date of termination.

3) Other Benefit Programs: Participation in all other benefit programs
ends as of the date of termination, except as noted below. Benefit programs
include, but are not limited to, Group Life Insurance, Long Term Disability,
Employee Discount Program, car allowance or company car program, the
Restricted Stock and Stock Option Plans, the Officer Merchandise Evaluation
Program, and the tax preparation and financial counseling programs. The
ability to exercise options ends on the date of termination of employment.
Participation in the fiscal year-end bonus program ends as of the date of
termination unless the termination of employment is without cause as defined
in Article VI (2) above.

If the Employee is released, without cause, under the terms of this
agreement, and the

<PAGE>

Employee has vested but unexercised stock options, or has stock options or
restricted stock which are due to vest within one month of the date of
termination, the Employee shall have the option to delay the termination for
up to one month, to allow for any restricted stock or stock options to vest,
or for the Employee to have time to exercise options. If the Employee elects
this option, the severance pay-out period would be reduced by a like period
of time (e.g., if the Employee delays his termination for one month in order
for stock to vest, the Employee would receive 11 months of severance payments
and medical and dental plan continuation, instead of 12 months). If
termination is for "cause," participation in all benefits, including stock
options and restricted stock ends either on the date of termination or the
end of the month in which the termination occurred, according to the
provisions of each benefit program. If termination of employment is due to
death, the right to exercise vested but unexercised stock options is in
accordance with the terms of the stock option plans. All of the above is
subject to the laws, regulations and plan provisions in effect at the time of
the Employee's termination.

ARTICLE IX

Monies Owed

To the extent that the Employee owes the Company any monies at the time
of termination of employment, or to the extent that taxes are due on any
Circuit City benefits, the Employee authorizes the Company to withhold such
amounts from his final paycheck or severance payment(s), or from
reimbursements or any other monies due to the Employee.

ARTICLE X

Notices

Any notice or other communication ("Notice") required under this
Agreement shall be in writing and shall be deemed to have been given or made
when personally delivered, or when mailed by registered or certified mail,
postage prepaid, return receipt requested, to the other party. In the case
of the Company, any Notice shall be delivered or mailed to its principal
office to the attention of the Secretary. In the case of the Employee, any
Notice shall be delivered or mailed to his last known address as reflected in
the records of the Company.

<PAGE>

ARTICLE XI

Assignment

This agreement is one for personal service and shall not be assignable
by Employee. However, Company may assign this agreement to an entity under
common control with Company or to an entity which succeeds to the portion of
the Company's business in which the Employee is employed.

ARTICLE XII

Survival of Covenants

Except to the extent expressly provided otherwise in this Agreement, the
covenants and agreements of the Employee and the Company, including but not
limited to those set forth in Articles IV and V, shall survive the
termination or expiration of this Agreement.

ARTICLE XIII

Entire Agreement; Amendments

This Agreement constitutes the entire agreement and supersedes all other
prior agreements and understandings, both written and oral, express or
implied, with respect to the subject matter of this Agreement. This
Agreement may be amended only by a writing executed by the parties.

ARTICLE XIV

Governing Law

This Agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Virginia.

<PAGE>

ARTICLE XV

Waiver

Failure to insist upon strict compliance with any term or condition of
this Agreement shall not constitute a waiver of the term or condition, nor
shall any waiver or relinquishment of any right or power under this Agreement
at any one or more times be deemed a waiver or relinquishment of such right
or power at any other time.

ARTICLE XVI

Severability

If any Article, paragraph, sentence, or clause hereof, including,
without limitation, Article IV and V ("Provision"), is deemed invalid or
unenforceable in whole or in part in any jurisdiction, all the other
Provisions in this Agreement including the affected Provision, to the extent
it is not deemed invalid or unenforceable, shall remain in full force and
effect in that, and any other, jurisdiction and shall be liberally construed
in order to effectuate the purpose and intent of the Agreement. The
invalidity or unenforceability of any Provision of this agreement in any
jurisdiction shall not affect the validity or enforceability of that
Provision in any other jurisdiction.

ARTICLE XVII

Arbitration

(1) Any disagreement or controversy between the parties concerning this
Agreement (other than disagreements or controversies concerning Articles IV
and V of this Agreement) shall be settled by arbitration in accordance with
Commercial Arbitration Rules of the

<PAGE>

American Arbitration Association ("AAA") and this Article. In the event of
any inconsistency between such Rules and this Agreement, this Agreement shall
control. The decision in writing of the sole arbitrator or of a majority of
the arbitrators, as the case may be, designated or selected in accordance
with this Article shall be final and binding on both parties and may be
enforced in a court of law or equity. The parties recognize that they wish
to use arbitration to settle disagreements or controversies concerning this
Agreement other than those excluded above and both parties waive their right
to appeal the arbitrators' decision to any court. The cost of arbitration,
including arbitrators' fees and expenses of hearings and conferences, shall
be shared equally by the parties. Each party shall pay its own attorney's
and experts' fees and related expenses.

(2) Notice of intent to arbitrate must be given within six months after
the aggrieved party knows or, with reasonable diligence, would have known of
the existence of the disagreement or controversy, unless the parties agree in
writing to extend such six months period.

(3) Disagreements and controversies submitted to arbitration hereunder
shall be decided by a sole arbitrator appointed by the AAA; provided,
however, that each party shall have the right, but not the obligation, to
designate one additional arbitrator. If a party wishes to avail himself of
such right, such party shall give written notice naming such additional
arbitrator to the other party within 30 days after the notice of intent to
arbitrate is given.

(4) If the Employee breaches the provisions of Articles IV or V, he
shall not be entitled to receive any amounts due under this Agreement that
have not been previously paid to him.

(5) The Employee recognizes and acknowledges that in the event of any
default in or breach of any of the terms, conditions, and provisions of
Articles IV or V of this Agreement (either actual or threatened) by the
Employee, the Company will suffer irreparable harm and its remedies at law
will be inadequate. Accordingly, the Employee agrees that, in such event,
the Company shall have the right to specific performance and injunctive
relief in addition to any and all other remedies and rights available to the
Company under this Agreement, or at law or in equity, and all rights and
remedies shall be cumulative.

(6) Disagreements or controversies concerning Articles IV or V of this
Agreement may be settled by arbitration in accordance with this Article if
both parties so agree in writing.

<PAGE>

The offer contained herein remains open until 5 p.m. on May 17, 1995.
To confirm that this letter states our agreement, please sign the enclosed
copy on the line above your name, date it, initial each page in the space
provided for that purpose, and return the copy to Wanda Moser, Personnel
Operations Manager, in the enclosed envelope by May 17, 1995. This agreement
is not effective until received by Wanda Moser, who will sign it to verify
receipt and will send you a fully executed copy for your records,

IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and the year first written below.

CIRCUIT CITY STORES, INC.

By: s/Richard L. Sharp May 16, 1995
Richard L. Sharp, Date
President and Chief Executive Officer

AGREED: s/Richard S. Birnbaum May 14, 1995
Richard S. Birnbaum SS# ###-##-#### Date

RECEIVED: s/Wanda Moser May 17, 1995
Wanda Moser Date

EXHIBIT 10(f)

AMENDMENT NO. 1
1994 STOCK INCENTIVE PLAN

The following resolutions containing amendments to the 1994 Stock
Incentive Plan were adopted on February 10, 1995, by the Board of Directors
of Circuit City Stores, Inc.:

RESOLVED, that Section 4 of the Company's 1994 Stock
Incentive Plan, as adopted February 15, 1994 (the "Plan"), be
amended by inserting the word "one" before the word "employee" on
line 4.

RESOLVED, that Section 6(c) of the Plan be amended by
inserting after the last sentence in this Section the sentence:
"If shares of Restricted Stock are issued without certificates,
notice of the restrictions set forth in the Plan and the
Participant's Award Agreement must be given to the shareholder in
the manner required by law."

RESOLVED, that Section 6(f) of the Plan be amended by
inserting after the first sentence the following sentence:
"Arrangements satisfactory to the Company may, in the sole
discretion of the Company, include the obtaining of a loan from
the Company to pay such taxes."

RESOLVED, that Section 6(f) of the Plan be further amended
by inserting after the word "Participant" at the end of the
present second sentence, the following sentence: "If Restricted
Stock is being issued to a Participant without the use of a stock
certificate, the restrictions set forth in paragraph (b) shall be
communicated to the shareholder in the manner required by law."

RESOLVED, that Section 6(f) of the Plan be amended by
inserting after the last sentence in this Section the sentence,
"The Committee has the express authority to change any election
procedure it establishes at any time."

RESOLVED, that Section 7(d)(iii) of the Plan be amended by
inserting after the phrase "(the `Limitation Amount')" on line 4
the sentence: "The foregoing Limitation Amount is intended to
comply with Section 422 of the Internal Revenue Code; if the
Internal Revenue Code should be amended to increase the
limitation contained in Section 422, the foregoing Limitation
Amount shall also be automatically increased."

RESOLVED, that Section 9 of the Plan be amended by adding
the following sentence at the end of that Section: "The employee
shall not be entitled to make payment of the exercise price other
than in cash unless provisions for an alternative payment method
are included in the employee's stock option agreement or are
agreed to in writing by the Company with the approval of the
Committee prior to exercise of the Option."

Reported Historical Information
<TABLE>
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA) 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net sales and operating revenues $5,582,947 $4,130,415 $3,269,769 $2,790,232 $2,366,901
Net earnings $ 167,875 $ 132,400 $ 110,250 $ 78,223 $ 3,151
Net earnings per share $ 1.72 $ 1.36 $ 1.15 $ 0.82 $ 0.03
Total assets $2,004,055 $1,554,664 $1,262,930 $ 999,582 $ 874,063
Long-term debt, excluding current installments $ 178,605 $ 29,648 $ 82,387 $ 85,415 $ 94,350
Deferred revenue and other liabilities $ 241,866 $ 268,360 $ 232,054 $ 187,158 $ 151,806
Cash dividends per share paid on
common stock $ 0.10 $ 0.08 $ 0.06 $ 0.05 $ 0.05
</TABLE>

Management's Discussion and Analysis of Results of Operations
and Financial Condition

Our objective is to manage Circuit City's resources to create maximum long-
term value for the Company's shareholders. We achieve this objective by
adhering to the following policies:

1) We manage our existing business, primarily the current Superstore
markets, to produce the highest possible long-term returns.
2) We make new investments that we believe will increase our earnings and
produce returns above our cost of capital.

The results generated by current operations and by the Company's fiscal
1995 investments are reviewed below.

Results of Operations
SALES GROWTH
Total sales increased 35 percent in fiscal 1995, to $5.58 billion. In
fiscal 1994, total sales were $4.13 billion, a 26 percent increase from
$3.27 billion in fiscal 1993.
PERCENTAGE SALES CHANGE FROM PRIOR YEAR
Circuit City
All Comparable Industry
FISCAL Stores Stores Sales*
1995 35% 15 % 11 %
1994 26% 8 % 7 %
1993 17% 7 % 7 %
1992 18% 1 % 0 %
1991 14% (3)% (1)%

*The industry sales rates are derived from Electronic Industries
Association, Association of Home Appliance Manufacturers, Recording
Industry Association of America and Company estimates of audio, video, home
office, telecommunications, appliance and music software sales. Home office
and telecommunications products are not included in industry sales for
fiscal 1991; music software is not included in industry sales prior to
fiscal 1995. In those years, Circuit City was not a significant participant
in these categories.

Circuit City's total sales growth reflects continued expansion of the
Superstore base and strong comparable store sales growth for the last three
years. In fiscal 1995, the Company increased its rate of expansion, opening
a net of 59 Superstores compared with 39 stores in the previous fiscal
year. The Company entered the following major metropolitan markets:
Minneapolis, New Orleans, Little Rock, Kansas City, Cleveland, Portland and
Seattle. The Company also opened stores in smaller markets and added stores
to existing markets.
Today, the Company operates four Circuit City Superstore formats with
square footage and merchandise assortments tailored to the population and
volume expectations for specific trade areas. The "D" format was developed
in fiscal 1995 to serve the most populous trade areas. Selling space in the
"D" format averages about 22,000 square feet with total square footage
averaging 40,698. The "D" stores offer the largest merchandise assortment
of all the formats. The "C" format is designed to serve moderately smaller
trade areas and provides a highly competitive merchandise assortment. New
"C" stores typically have about 17,000 square feet of selling space; total
square footage for all "C" stores averages 33,814. The "B" format often is
located in smaller markets or in trade areas that are on the fringes of
larger metropolitan markets. Selling space in these stores averages
approximately 10,000 square feet with an average total square footage of
23,293. They offer a broad merchandise assortment that maximizes returns in
these less populated areas. The "A" format serves the least populated trade
areas. Selling space in the existing stores averages approximately 7,000
square feet, and total square footage averages 15,875. The "A" stores
feature a layout, staffing levels and merchandise assortment that creates
high productivity in the smallest markets. In fiscal 1996, we expect to
replace approximately 20 "B" and "C" stores that are located in the most
highly populated trade areas with the new "D" format.
The Company also operates 35 mall-based Circuit City Express stores. These
stores are located in regional malls, average approximately 3,000 square
feet in size and sell small, gift-oriented items. During fiscal 1995, the
Company opened four Circuit City Express stores and closed three stores
located in underperforming malls. The Company expects to open additional
locations in fiscal 1996.

Store Mix
Retail Units at Year End
FISCAL 1995 1994 1993 1992 1991
Superstore
"D" Superstore 12 - - - -
"C" Superstore 257 219 188 170 150
"B" Superstore 37 30 24 11 5
"A" Superstore 6 4 2 2 2
Electronics-Only 5 7 7 11 14
Circuit City Express 35 34 39 34 14
TOTAL 352 294 260 228 185

Throughout fiscal 1995, comparable store sales growth exceeded management's
expectations. The strong growth resulted from the rapid growth of personal
computer sales for the Company and for the industry, a healthy economic
climate for hard goods sales, effective execution of the Company's
marketing programs and the recent addition of music software to the
merchandise assortment.
During most of the past three years, Circuit City's comparable store sales
growth has been similar to or better than the industry's growth. The fiscal
1995 acceleration in industry growth reflects dramatic home office product
sales and the strong hard goods retail climate, both of which also
benefited Circuit City. Management believes that the more rapid increase in
the Company's comparable store sales indicates market share gains resulting
from the strong appeal of the Circuit City consumer offer.
For the Company's core retail business, gross dollar sales from all
extended warranty programs were 5.8 percent of sales in fiscal year 1995,
5.8 percent in fiscal year 1994 and 6.0 percent in fiscal 1993. Total
extended warranty revenue, which is reported in total sales, was 5.4
percent of sales in fiscal year 1995, 4.8 percent in fiscal year 1994 and
4.6 percent in fiscal year 1993. The gross profit margins on products sold
with extended warranties are higher than the gross profit margins on
products sold without extended warranties. Late in fiscal 1994, the Company
began selling two new extended warranty programs on behalf of unrelated
third parties that issue these plans for merchandise sold by the Company
and other retailers. One of these programs is sold in most major markets
and features in-home service for personal computer products. Repairs to the
products covered are provided by General Electric Company. The second
program is an insured product provided by Virginia Surety Company, Inc., a
subsidiary of AON Corporation. Virginia Surety carries an A. M. Best
Company rating of superior (A+). This program covers electronics and major
appliances and at year-end was offered by approximately 50 percent of the
Superstores. The Company's after-market solicitation operation also sells a
Virginia Surety insured product. Under the third-party programs, Circuit
City acts as seller for the unrelated third parties and has no contractual
liability to the customer under the extended warranty plans. Commission
revenue from the third-party extended warranty plans is recognized
immediately while revenue from Circuit City extended warranties is deferred
and amortized on a straight-line basis over the life of the contracts. The
increase in third-party warranty sales contributed to the growth in total
extended warranty revenue. Third-party extended warranty revenue was 2.3
percent of total sales in fiscal 1995 and 0.7 percent in fiscal 1994. The
Company expects third-party extended warranty revenue to continue
increasing in fiscal 1996.

SUPERSTORE SALES PER TOTAL SQUARE FOOT
FISCAL
1995 $584
1994 $523
1993 $487
1992 $460
1991 $469

Superstore Sales Per Total Square Foot. Over the last five years, the
Company's new store designs and remodels and replacements of existing
stores have significantly increased the percentage of store square footage
devoted to selling space. This increase has allowed Circuit City to expand
the merchandise assortment in each store, adding product categories such as
personal computers and music software and strengthening the selection in
areas such as home theater. As a result, Superstore sales per total square
foot have increased. The rise has been limited by the Company's continuing
strategy of adding stores in existing markets and by the introduction of
"A" and "B" stores for smaller trade areas. Market additions draw sales
from existing stores in the market but enhance market share and advertising
leverage.

SALES BY MERCHANDISE CATEGORIES*
FISCAL 1995 1994 1993 1992 1991
TV 19% 20% 23% 23% 24%
VCR/Camcorders 14% 17% 19% 20% 22%
Audio 20% 21% 20% 21% 22%
Home Office 20% 12% 7% 5% NA
Appliances 15% 18% 19% 19% 18%
Other 12% 12% 12% 12% 14%
TOTAL 100% 100% 100% 100% 100%
* "Home Office" electronics are included in the "Other" category in fiscal
year 1991.

Sales by Merchandise Categories. Home office products, primarily personal
computers, have increased dramatically as a percentage of the Company's
sales during the past five years. This growth reflects rapid increases in
household penetration of this product and the strength of Circuit City's
consumer offer in the category. Within the consumer electronics categories,
the greatest sales growth has occurred among the fully featured products
such as large-screen televisions and SurroundSound audio systems. A lack of
new product features and declining retail prices for camcorders have
limited sales growth in the video cassette recorder/camcorder category. The
lower percentage of sales produced by the audio, video and appliance
categories reflects the rate of growth in home office in relation to the
other categories. The addition of music software to the product assortment
in 208 stores is reflected in the "Other" product category.
Impact of Inflation. Inflation has not been a significant contributor to
industry growth or to Circuit City's sales growth during the last five
years. The Company expects no significant change in this trend. Because the
Company purchases substantially all products, including consumer
electronics, in U.S. dollars, prices are not directly impacted by the value
of the dollar in relation to other foreign currencies, including the
Japanese yen.

COST OF SALES, BUYING AND WAREHOUSING
The gross profit margin declined to 24.8 percent of sales in fiscal 1995
compared with 26.8 percent in fiscal 1994 and 28.3 percent in fiscal 1993.
The gross profit margin trend reflects increased competition in many of the
Company's markets and the shift in the sales mix to include a larger
percentage of personal computer products and music software. Both of these
product categories produce gross profit margins lower than the Company's
average.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
The Company's lower gross profit margin has been largely offset by
improvements in selling, general and administrative expenses as a percent
of sales. The expense ratio was 19.8 percent of sales in fiscal 1995, 21.6
percent in fiscal 1994 and 22.8 percent in fiscal 1993. The improvement in
the expense ratio primarily reflects comparable store sales growth achieved
throughout the three-year period, productivity gains at the store level and
a net contribution from the credit card program.
A principal contributor to the store-level productivity improvements has
been one-stop shopping. Introduced in fiscal 1994, one-stop shopping allows
the sales counselor to complete the entire transaction for the customer and
further improves store operating efficiency. Operating profits generated by
the Company's credit card bank subsidiary are recorded as a reduction to
SG&A expenses. In fiscal 1994 and 1993, the subsidiary benefited from a
generally low interest rate environment and, therefore, a lower-than-
anticipated cost of funds. In fiscal 1995, the Company entered into
interest rate swap agreements, as explained in Note 9 to the Consolidated
Financial Statements, to better match funding costs with the credit
portfolio's variable-rate receivables.

INTEREST EXPENSE
Interest expense was 0.2 percent of sales in fiscal 1995, 0.1 percent in
fiscal 1994 and 0.1 percent in fiscal 1993. The increase from fiscal 1994
to fiscal 1995 reflects higher interest rates, the addition of $100 million
of long-term debt late in the second quarter and a greater level of
seasonal borrowings resulting from the Company's growth.

INCOME TAXES
The Company's effective income tax rate was 37.5 percent in fiscal 1995,
36.7 percent in fiscal 1994 and 37.0 percent in fiscal 1993. An increase in
the federal statutory income tax rate in fiscal 1994 required a revaluation
of the Company's deferred tax asset. That revaluation had a favorable
impact on the fiscal 1994 provision for income taxes and resulted in the
lower effective tax rate for that fiscal year. The higher federal statutory
income tax rate produced an increase in the Company's effective tax rate in
the latter half of fiscal 1994 and throughout fiscal 1995.

NET EARNINGS
Net earnings rose 27 percent to $167.9 million in fiscal 1995. In fiscal
1994, net earnings were $132.4 million, a 20 percent increase from $110.3
million in fiscal 1993. Net earnings per share rose 26 percent in fiscal
1995, to $1.72, and 18 percent in fiscal 1994, to $1.36 from $1.15 in
fiscal 1993.

RETURN ON SALES
Return on sales was 3.0 percent in fiscal 1995 compared with 3.2 percent in
fiscal 1994 and 3.4 percent in fiscal 1993.

OPERATIONS OUTLOOK
Management believes that continued investment in Superstore expansion will
maximize long-term shareholder value. Management estimates that in fiscal
1996 the remaining markets suitable for Superstore expansion will represent
$39 billion of the consumer electronics, home office, major appliance and
music software industry's total retail sales potential of $91 billion.
Before the end of the decade, Circuit City expects to expand the Superstore
base into most of these markets and to expand its average market shares in
all product categories. In fiscal year 1996, the Company expects to open an
estimated 65 Superstores, including approximately 35 "D" stores, 15 "C"
stores, 10 "B" stores and five "A" stores. Approximately two-thirds of the
new Superstores will open in new markets. The Company also plans to replace
approximately 20 "B" and "C" stores with the larger format "D" stores.
Management expects that comparable store sales growth, and thus total sales
growth, will moderate from the higher-than-anticipated levels achieved in
fiscal 1995. A continuation of the Company's aggressive marketing approach
in highly competitive markets and continued growth in the Company's
personal computer and music software sales are expected to again reduce the
gross profit margin. Management anticipates that comparable store sales
growth, improvements in store operating efficiency and increased leverage
of overhead expenses will reduce the expense ratio and partially offset the
lower gross profit margin. Although the Company expects lower pre-tax and
net profit margins in fiscal 1996, management believes that the Company's
financial performance and market research indicate that the Company is
well-positioned competitively and financially to produce strong long-term
returns and that its expansion plans will further increase long-term
earnings potential.

Financial Condition
LIQUIDITY AND CAPITAL RESOURCES

Cash Flow. For the past three years, Circuit City's Superstore operations
have generated significant resources to support the Company's continued
growth. Net cash provided by operating activities in fiscal 1995 was $47.0
million, compared with $108.3 million in fiscal 1994 and $150.0 million in
fiscal 1993. The fiscal 1995 decrease principally reflects a decrease in
deferred revenue and increases in merchandise inventory and accounts
receivable that were partly offset by increases in accounts payable and the
provision for deferred income taxes and by higher net earnings. The
inventory growth reflects inventory for new stores opened in fiscal 1995;
store openings planned for early fiscal 1996; and inventory for CarMax, the
Company's test concept selling used cars. The rise in accounts receivable
principally includes credit card receivables generated by the Company's
wholly owned credit card bank subsidiary and auto loan receivables related
to the CarMax concept. The decrease in deferred revenue primarily reflects
an increase in the sale of third-party warranties, for which commission
revenue is recognized immediately, and a decrease in the sale of Circuit
City warranties, for which the revenue is deferred and amortized over the
life of the contracts. The change in deferred income taxes resulted from
the lower deferred revenue and a reduction in the difference between tax
and financial statement recognition of deferred revenue.
The Company funded capital expenditures of $375.4 million in fiscal 1995
with $151.5 million in proceeds from sales of property and equipment,
proceeds from a seven-year, $100 million unsecured bank term loan and with
cash flows from operations. The proceeds from sales of property and
equipment include $86.0 million from sale-leaseback transactions, $33.9
million related to landlord reimbursements for improvements on leased land
and $31.6 million from other sources. Capital expenditures in fiscal 1995
principally reflect Superstores opened during the year and a portion of the
new Superstores opening in fiscal 1996. The sale-leaseback transactions
completed in fiscal 1995 are largely related to real estate purchased in
fiscal years 1995 and 1994. The Company expects to complete additional
sale-leaseback transactions in fiscal 1996. Capital expenditures of $252.3
million in fiscal 1994 and $189.6 million in fiscal 1993 largely were
incurred in connection with the Superstore expansion program. The
expenditures were funded primarily with net cash provided by operating
activities, sale-leaseback arrangements, and landlord reimbursements.
The Company's credit card bank subsidiary primarily funds the credit card
program by selling the receivables through several securitization programs.
Under the terms of these programs, the bank subsidiary is able to sell the
receivables it generates while retaining a small interest in the
receivables. In fiscal 1995, the Company's credit card bank subsidiary
converted two asset securitization structures for its private-label credit
card into a single master trust that allows the transfer of up to $760
million in receivables through private placement and the public market. As
explained in Note 9 to the Consolidated Financial Statements, the Company
entered into interest rate swap agreements, which total $300 million and
which are related to the public issuance of securities by the master trust.
The issuance included $344 million of five-year, fixed-rate certificates to
fund the consumer credit receivables. The interest rate swaps enable the
Company to better match funding costs to the underlying variable-rate
receivables. The Company's credit card bank subsidiary also has in place an
asset securitization program that allows the transfer of up to $300 million
in receivables related to its other bank card programs. The Company expects
that all securitization programs will be expanded to accommodate future
receivables growth. The Company also believes that it can utilize
securitization transactions to finance receivables related to the
automobile business.

Capital Structure. Total assets at February 28, 1995, were $2.00 billion,
up $449.4 million, or 29 percent since February 28, 1994. The rise in
assets includes increases of $314.4 million in inventory, $154.9 million in
net property and equipment and $75.6 million in net receivables, which were
partly offset by a $73.7 million decrease in deferred income taxes.

The Company has funded expansion with internally generated funds, sale-
leaseback transactions, operating leases and long-term debt. The Company
has funded consumer receivables through securitization transactions. In
fiscal 1995, the Company replaced $60 million in subordinated debt that
matured in fiscal 1994 with the seven-year, $100 million unsecured bank
term loan. Average short-term debt rose in fiscal 1995 as the Company
utilized seasonal borrowing lines primarily to finance higher inventory
needs resulting from more rapid store expansion and the expansion of the
CarMax test concept.

During the period from fiscal year 1991 to 1995, stockholders' equity grew
substantially in both absolute dollars and as a percentage of total
capitalization. From fiscal 1994 to 1995, stockholders' equity increased 24
percent to $877.4 million. Capitalization for the past five years is
illustrated below:

<TABLE>
FISCAL 1995 1994 1993 1992 1991
(DOLLAR AMOUNTS IN MILLIONS) $ % $ % $ % $ % $ %
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Long-term debt, excluding current installments 178.6 14 29.6 3 82.4 9 85.4 12 94.3 15
Deferred revenue and other liabilities 241.9 19 268.4 27 232.1 26 187.1 26 151.8 25
Total stockholders' equity 877.4 67 710.4 70 575.5 65 448.0 62 366.9 60
TOTAL CAPITALIZATION 1,297.9 100 1,008.4 100 890.0 100 720.5 100 613.0 100
</TABLE>

Increases in net earnings contributed to a return on equity of 21.1 percent
in fiscal 1995 and 20.6 percent in fiscal 1994, meeting the Company's long-
term objective of 20 percent.
The Company expects to maintain its existing long-term capitalization
strategy in fiscal 1996. Management anticipates that capital expenditures
of approximately $575 million will be funded through a combination of
internally generated funds, sale-leaseback transactions and operating
leases and that securitization transactions will finance the increase in
credit card receivables. In fiscal 1996, management expects to refinance
$53 million of short-term debt on a long-term basis by entering into a $100
million multi-year term loan with a group of banks. At the end of fiscal
1995, the Company maintained a multi-year, $100 million unsecured revolving
bank credit facility and $285 million in seasonal lines that are renewed
annually with various banks.

Common Stock
The Company's common stock is traded on the New York Stock Exchange.
Quarterly market price and dividend data are shown below:
<TABLE>
MARKET PRICE OF COMMON STOCK DIVIDENDS
FISCAL 1995 1994 1995 1994
HIGH LOW HIGH LOW
<S> <C> <C> <C> <C> <C> <C>
1st $23.00 $17.25 $33.88 $23.50 $.020 $.020
2nd $24.63 $19.50 $33.75 $24.75 $.025 $.020
3rd $27.50 $23.13 $29.13 $24.13 $.025 $.020
4th $25.13 $21.00 $26.00 $16.63 $.025 $.020
TOTAL $.095 $.080
</TABLE>

<PAGE>

Consolidated Statements of Earnings
<TABLE>
Years Ended February 28
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA) 1995 % 1994 % 1993 %
<S> <C> <C> <C> <C> <C> <C>
NET SALES AND OPERATING REVENUES $5,582,947 100.0 $4,130,415 100.0 $3,269,769 100.0
Cost of sales, buying and warehousing 4,197,947 75.2 3,024,759 73.2 2,346,049 71.7
GROSS PROFIT 1,385,000 24.8 1,105,656 26.8 923,720 28.3
Selling, general and administrative
expenses [NOTE 8] 1,106,370 19.8 891,865 21.6 744,650 22.8
Interest expense [NOTE 3] 10,030 0.2 4,791 0.1 3,820 0.1
TOTAL EXPENSES 1,116,400 20.0 896,656 21.7 748,470 22.9
Earnings before income taxes 268,600 4.8 209,000 5.1 175,250 5.4
Provision for income taxes [NOTE 4] 100,725 1.8 76,600 1.9 65,000 2.0
NET EARNINGS $ 167,875 3.0 $ 132,400 3.2 $ 110,250 3.4
Weighted average common shares
and common share equivalents 97,369 97,391 96,140
NET EARNINGS PER SHARE $1.72 $1.36 $1.15
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

Consolidated Balance Sheets
<TABLE>
At February 28
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA) 1995 1994
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 46,962 $ 75,194
Net accounts and notes receivable [NOTE 9] 264,565 188,990
Merchandise inventory 1,035,776 721,348
Deferred income taxes [NOTE 4] 25,696 26,700
Prepaid expenses and other current assets 14,162 11,476
TOTAL CURRENT ASSETS 1,387,161 1,023,708
Property and equipment, net [NOTES 2 AND 3] 592,956 438,096
Deferred income taxes [NOTE 4] 5,947 78,688
Other assets 17,991 14,172
TOTAL ASSETS $2,004,055 $1,554,664

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current installments of long-term debt
[NOTES 3 AND 7] $ 2,378 $ 1,819
Accounts payable 576,578 419,037
Accrued expenses and other current liabilities 113,631 86,826
Accrued income taxes 13,533 38,582
TOTAL CURRENT LIABILITIES 706,120 546,264
Long-term debt, excluding current installments
[NOTES 3 AND 7] 178,605 29,648
Deferred revenue and other liabilities 241,866 268,360
TOTAL LIABILITIES 1,126,591 844,272

STOCKHOLDERS' EQUITY [NOTE 5]:
Common stock, $0.50 par value; 150,000,000
shares authorized; 96,476,000 shares issued
and outstanding (96,080,000 in 1994) 48,238 48,040
Capital in excess of par value 72,639 64,485
Retained earnings 756,587 597,867
TOTAL STOCKHOLDERS' EQUITY 877,464 710,392
Commitments [NOTES 6, 7 AND 9]
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,004,055 $1,554,664

See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

Consolidated Statement of Cash Flows
<TABLE>
Years Ended February 28
(AMOUNTS IN THOUSANDS) 1995 1994 1993
OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net earnings $167,875 $132,400 $110,250
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 66,866 55,012 41,705
Loss on sales of property and equipment 2,199 1,910 993
Provision for deferred income taxes 73,745 (17,800) (19,478)
(Decrease) increase in deferred revenue and
other liabilities (26,494) 36,306 44,896
Increase in net accounts and notes receivable (75,575) (68,542) (26,932)
Increase in merchandise inventory, prepaid
expenses and other current assets (317,114) (203,783) (96,607)
(Increase) decrease in other assets (3,819) (522) 1,117
Increase in accounts payable, accrued expenses
and other current liabilities, and accrued
income taxes 159,297 173,300 94,064
NET CASH PROVIDED BY OPERATING ACTIVITIES 46,980 108,281 150,008
INVESTING ACTIVITIES:
Purchases of property and equipment (375,406) (252,256) (189,649)
Proceeds from sales of property and equipment 151,481 128,029 95,464
NET CASH USED IN INVESTING ACTIVITIES (223,925) (124,227) (94,185)
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 153,000 - -
Principal payments on long-term debt (3,484) (52,748) (3,127)
Proceeds from issuance of common stock, net 8,352 10,150 22,698
Dividends paid (9,155) (7,674) (5,433)
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 148,713 (50,272) 14,138

(Decrease) increase in cash and cash
equivalents (28,232) (66,218) 69,961
Cash and cash equivalents at beginning of year 75,194 141,412 71,451
Cash and cash equivalents at end of year $ 46,962 $ 75,194 $141,412

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 8,150 $ 5,297 $ 5,526
Income taxes $ 98,894 $ 81,773 $ 70,890

See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

Consolidated Statment of Shareholders' Equity
<TABLE>
Common Capital in
Shares Common Excess of Retained
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA) Outstanding Stock Par Value Earnings Total
<S> <C> <C> <C> <C> <C>
BALANCE AT MARCH 1, 1992 93,867 $46,934 $32,743 $368,324 $448,001
Net earnings - - - 110,250 110,250
Exercise of common stock options [NOTE 5] 1,982 991 15,031 - 16,022
Shares issued under Employee
Stock Purchase Plan [NOTE 5] 67 33 1,202 - 1,235
Shares issued under the 1988 Stock
Incentive Plan [NOTE 5] 220 110 3,350 - 3,460
Tax benefit from stock issued - - 12,700 - 12,700
Shares cancelled upon reacquisition by Company (466) (233) (9,917) - (10,150)
Unearned compensation-restricted stock [NOTE 5] - - (569) - (569)
Cash dividends-common stock ($0.06 per share) - - - (5,433) (5,433)

BALANCE AT FEBRUARY 28, 1993 95,670 47,835 54,540 473,141 575,516
Net earnings - - - 132,400 132,400
Exercise of common stock options [NOTE 5] 316 158 2,994 - 3,152
Shares issued under Employee
Stock Purchase Plan [NOTE 5] 76 38 1,895 - 1,933
Shares issued under the 1988 Stock
Incentive Plan [NOTE 5] 146 73 3,589 - 3,662
Tax benefit from stock issued - - 3,367 - 3,367
Shares cancelled upon reacquisition by Company (128) (64) (2,014) - (2,078)
Unearned compensation-restricted stock [NOTE 5] - - 114 - 114
Cash dividends-common stock ($0.08 per share) - - - (7,674) (7,674)

BALANCE AT FEBRUARY 28, 1994 96,080 48,040 64,485 597,867 710,392
NET EARNINGS - - - 167,875 167,875
EXERCISE OF COMMON STOCK OPTIONS [NOTE 5] 260 130 2,519 - 2,649
SHARES ISSUED UNDER EMPLOYEE
Stock Purchase Plan [NOTE 5] 87 43 1,868 - 1,911
Shares issued under the 1994 Stock
Incentive Plan [NOTE 5] 211 106 3,740 - 3,846
Tax benefit from stock issued - - 3,272 - 3,272
Shares cancelled upon reacquisition by Company (162) (81) (3,089) - (3,170)
Unearned compensation-restricted stock [NOTE 5] - - (156) - (156)
Cash dividends-common stock ($0.10 per share) - - - (9,155) (9,155)

BALANCE AT FEBRUARY 28, 1995 96,476 $48,238 $72,639 $756,587 $877,464
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.

<PAGE>

Notes to Consolidates Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Principles of Consolidation: The consolidated financial statements
include the accounts of Circuit City Stores, Inc. and its subsidiaries (the
Company), all of which are wholly owned. All significant intercompany
balances and transactions have been eliminated in consolidation.
(B) Cash and Cash Equivalents: Cash equivalents of $18,719,000 and
$35,800,000 at February 28, 1995 and 1994, respectively, consist of highly
liquid debt securities with original maturities of three months or less.
(C) Fair Value of Financial Instruments: The carrying value of the
Company's financial instruments, excluding interest rate swap agreements,
approximates fair value due to the short-term maturities of the assets and
liabilities. As discussed in Note 9, interest rate swaps are not held for
trading purposes, and accordingly, are not carried at fair value.
(D) Merchandise Inventory: Inventory is stated at the lower of cost or
market. Cost is determined by the average cost method.
(E) Property and Equipment: Property and equipment is stated at cost less
accumulated depreciation and amortization. Depreciation and amortization
are calculated using the straight-line method over the assets' estimated
useful lives, which range from three to 25 years.
Property held under capital leases is stated at the lower of the present
value of the minimum lease payments at the inception of the lease or market
value and is amortized straight-line over the lease term or the estimated
useful life of the asset, whichever is shorter.
(F) Pre-opening Expenses: Expenses associated with the opening of new
stores are deferred and amortized ratably over the period from the date of
the store opening to the end of the fiscal year.
(G) Income Taxes: The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes." Deferred income taxes reflect the impact of temporary
differences between the amounts of assets and liabilities recognized for
financial reporting purposes and the amounts recognized for income tax
purposes, measured by applying currently enacted tax laws. The Company
recognizes deferred tax assets if it is more likely than not that a benefit
will be realized.
(H) Deferred Revenue: The Company sells its own extended warranty contracts
and extended warranty contracts on behalf of unrelated third parties. The
contracts extend beyond the normal manufacturer's warranty period, usually
with terms of coverage (including the manufacturer's warranty period)
between 12 and 60 months.
All revenue from the sale of the Company's own extended warranty contracts
is deferred and amortized on a straight-line basis over the life of the
contracts. Incremental direct contract costs related to the sale of
contracts are deferred and charged to expense in proportion to the revenue
recognized. All other costs are charged to expense as incurred. Commission
revenue for the unrelated third-party extended warranty plans is recognized
at the time of sale.
(I) Earnings Per Share: Earnings per share is computed using the weighted
average number of shares of common stock and common stock equivalents
outstanding during the year.
(J) Reclassifications: Certain amounts in prior years have been
reclassified to conform to classifications adopted in fiscal 1995.

2. PROPERTY AND EQUIPMENT
Property and equipment, at cost, at February 28 is summarized as follows:

(AMOUNTS IN THOUSANDS) 1995 1994
Land and buildings $ 83,109 $ 78,426
Construction in progress 122,446 40,543
Furniture, fixtures and equipment 344,923 282,811
Leasehold improvements 286,610 221,094
Capital leases (primarily buildings) 13,679 13,679
850,767 636,553
Less accumulated depreciation and
amortization 257,811 198,457
Property and equipment, net $592,956 $438,096

3. DEBT
Long-term debt at February 28 is summarized as follows:

(AMOUNTS IN THOUSANDS) 1995 1994
Term loan $100,000 $ -
Short-term debt expected to be refinanced 53,000 -
Industrial Development Revenue
Bonds due through 2006 at various
prime-based rates of interest ranging
from 5.9% to 7.3% 14,698 18,000
Obligations under capital leases [NOTE 7] 13,285 13,467
Total long-term debt 180,983 31,467
Less current installments 2,378 1,819
Long-term debt, excluding
current installments $178,605 $ 29,648

In July 1994, the Company entered into a seven-year, $100,000,000,
unsecured bank term loan. Principal is due in full at maturity with
interest payable periodically at LIBOR plus 0.5 percent.
The Company has the intent and ability to refinance the $53,000,000 of
short-term committed and uncommitted bank borrowings on a long-term basis
by entering into a multi-year term loan with a group of banks.
Consequently, the Company has classified the short-term debt as long-term
for financial reporting purposes.
The Industrial Development Revenue Bonds are collateralized by land,
buildings and equipment with an aggregate carrying value of approximately
$15,400,000 at February 28, 1995, and $19,000,000 at February 28, 1994.
The Company maintains a $100,000,000 unsecured revolving credit agreement
with four banks. The agreement calls for interest based on certain money
market rates and a commitment fee of 0.24 percent per annum. The agreement
terminates June 30, 1996; however, it provides for annual one-year
extensions on or before June 30 of each succeeding year. Upon termination
of the agreement, so long as the balance outstanding is a minimum of
$10,000,000, the agreement converts to a term loan payable in 16 equal
quarterly installments. No amounts were outstanding under the revolving
credit agreement at February 28, 1995 or 1994.
The scheduled aggregate annual principal payments on long-term obligations
for the next five years are as follows: 1996 - $2,378,000; 1997 -
$1,436,000; 1998 - $1,489,000; 1999 - $1,586,000; 2000 - $1,743,000.
Under certain of the debt agreements, the Company must meet financial
covenants relating to minimum tangible net worth, current ratios and debt-
to-capital ratios. The Company was in compliance with all such covenants at
February 28, 1995 and 1994.
Short-term debt includes committed lines of credit and informal credit
arrangements. Amounts outstanding and committed lines of credit available
are as follows:

Years Ended February 28
(AMOUNTS IN THOUSANDS) 1995 1994 1993
Average short-term debt
outstanding $134,022 $77,392 $18,333
Maximum short-term debt
outstanding $465,000 $355,000 $148,000
Aggregate committed lines of
credit available $285,000 $145,000 $160,000

The weighted average interest rate on the outstanding short-term debt was
5.3 percent during fiscal 1995 and 3.3 percent during fiscal 1994 and
fiscal 1993.
The Company capitalizes interest in connection with the construction of
certain facilities. In fiscal 1995, interest capitalized amounted to
$3,846,000 ($2,626,000 and $2,986,000 in fiscal 1994 and 1993,
respectively).

4. INCOME TAXES
The Company files a consolidated federal income tax return. The components
of the provision for income taxes on earnings before income taxes follow:

Years Ended February 28
(AMOUNTS IN THOUSANDS) 1995 1994 1993
Current:
Federal $21,250 $85,680 $75,130
State 5,730 8,720 9,348
26,980 94,400 84,478
Deferred:
Federal 69,035 (14,790) (15,550)
State 4,710 (3,010) (3,928)
73,745 (17,800) (19,478)
Provision for income taxes $100,725 $76,600 $65,000

The enactment of the Omnibus Tax Reconciliation Act of 1993 on August 10,
1993, increased the federal statutory income tax rate for corporations from
34 percent to 35 percent effective January 1, 1993. This change in the
federal tax rate and the resulting revaluation of the Company's deferred
tax asset had a favorable impact on the fiscal 1994 provision for income
taxes. The effective income tax rates of 37.5 percent in fiscal 1995, 36.7
percent in fiscal 1994 and 37.0 percent in fiscal 1993 differ from the
federal statutory income tax rates of 35 percent in fiscal 1995 and 1994
and 34 percent in fiscal 1993 because of state income taxes, federal and
state income tax credits and the revaluation of the deferred tax asset in
fiscal 1994.
In accordance with SFAS No. 109, the tax effects of temporary differences
that give rise to a significant portion of the deferred tax assets and
liabilities at February 28, 1995 and 1994, are as follows:

(AMOUNTS IN THOUSANDS) 1995 1994
Deferred Tax Assets:
Deferred revenue $32,049 $ 99,364
Inventory capitalization 6,482 5,815
Accrued expenses 31,815 26,082
Other 5,114 4,335
Total gross deferred assets 75,460 135,596

Deferred Tax Liabilities:
Depreciation and amortization 30,510 20,691
Prepaid benefit programs 2,892 2,620
Other prepaid expenses 5,347 1,960
Other 5,068 4,937
Total gross deferred tax liabilities 43,817 30,208
Net Deferred Tax Asset $31,643 $105,388

The decrease in the net deferred tax asset during fiscal 1995 is due to a
reduction in deferred revenue and a more closely matched recognition of
deferred revenue for financial and tax reporting purposes.
Of the gross deferred tax assets at February 28, 1995 and 1994,
approximately $66 million and $119 million, respectively, can be realized
by carrybacks or offsetting of deferred tax liabilities. Based on the
Company's historical and current pre-tax earnings, management believes the
remaining amount will be realized through future taxable income, therefore,
no valuation allowance is necessary.

5. CAPITAL STOCK AND STOCK INCENTIVE PLANS

(A) Preferred Stock: In conjunction with the adoption in fiscal 1989 of a
Shareholders Rights Plan, preferred stock purchase rights were distributed
as a dividend at the rate of one right for each share of the Company's
common stock. The rights are exercisable only upon the attainment of, or
the commencement of a tender offer to attain, a specified ownership
interest in the Company by a person or group. When exercisable, each right
would entitle shareholders to buy one four-hundredth of a newly issued
share of Cumulative Participating Preferred Stock, Series E, $20 par value,
at an exercise price of $140 per share. A total of 500,000 shares of such
preferred stock, which have preferential dividend and liquidation rights,
have been authorized; 250,000 shares have been reserved. No such shares are
outstanding. In the event that an acquiring person or group engages in
certain transactions with the Company after the rights become exercisable,
each right will be converted into a right to purchase, for half the current
market price at that time, shares of the Company's common stock valued at
two times the exercise price.
The Company also has 1,500,000 shares of Undesignated Preferred Stock
authorized of which no shares are outstanding.
(B) Restricted Stock: The Company has issued restricted stock under the
provisions of the 1994 and 1988 Stock Incentive Plans whereby key employees
are granted restricted shares of the Company's common stock. Shares are
awarded in the name of the employee, who has all the rights of a
stockholder, subject to certain restrictions or forfeitures. Restrictions
on the awards generally expire three years from the date of grant. In
fiscal 1995, restricted stock awards for 211,404 shares were granted to
eligible employees. The market value of these shares has been recorded as
unearned compensation and is a component of stockholders' equity. Unearned
compensation is expensed over the restriction periods. In fiscal 1995, a
total of $2,552,500 was charged to operations ($2,955,400 in 1994 and
$2,955,900 in 1993). As of February 28, 1995, 447,879 restricted shares
were outstanding.

(C) Employee Stock Purchase Plan: The Company has an Employee Stock
Purchase Plan for all employees meeting certain eligibility criteria. Under
the Plan, eligible employees may purchase shares of the Company's common
stock, subject to certain limitations, at 85 percent of its market value.
Purchases are limited to 10 percent of an employee's eligible compensation,
up to a maximum of $7,500 per year. At February 28, 1995, a total of
537,295 shares remained available under the Plan. During fiscal 1995,
537,467 shares were issued to or purchased on the open market for employees
(436,400 and 407,990 in fiscal 1994 and 1993, respectively). The average
price per share was $22.23, $26.20 and $18.78 in fiscal 1995, 1994 and
1993, respectively. The purchase price discount is charged to operations
and totalled $1,760,200, $1,653,700 and $1,135,900 in fiscal 1995, 1994 and
1993, respectively.
(D) Stock Incentive Plans: Under the Company's stock incentive plans,
incentive and non-qualified stock options may be granted to management, key
employees and outside directors to purchase shares of the Company's common
stock. The exercise price for incentive stock options for employees and
non-qualified options for outside directors is the market value at the date
of grant; for non-qualified options granted under the 1988 Plan for
employees it is at least 85 percent of the market value at the date of
grant (100 percent under the 1994 Plan). Options are generally exercisable
over a period of from one to 10 years from the date of grant.
Changes in stock options outstanding (and option exercise prices for such
options) are as follows:

Years Ended February 28
1995 1994 1993
Options outstanding at
beginning of year
($5.72 to $33.00) 3,593,745 3,494,626 4,017,342
Granted
($15.69 to $33.00) 750,500 562,425 1,593,806
Exercised
($5.72 to $25.00) (260,234) (316,243) (1,981,362)
Cancelled
($6.25 to $33.00) (374,740) (147,063) (135,160)
Options outstanding at
end of year
($5.94 to $33.00) 3,709,271 3,593,745 3,494,626
Options exercisable at
end of year
($5.94 to $29.13) 2,070,319 1,662,032 743,268
Shares available for grant
at end of year (options
and restricted stock) 3,276,544 1,010,488 1,519,754

The stock incentive plans provide for the granting of stock appreciation
rights (SARs) in tandem with non-qualified stock option grants at the
discretion of the board of directors' compensation and personnel committee.
The SARs granted to date become fully exercisable only upon a change of
control, as defined, of the Company, notwithstanding other conditions of
exercisability of the options. The SARs permit the optionee to surrender an
exercisable SAR for an amount equal to the excess of the market price of
the common stock over the option price when the right is exercised. Market
value is defined as the greater of the highest closing price of the
Company's stock during the 90 days preceding the change of control or the
closing price on the date preceding the exercises. As of February 28, 1995,
5,417,163 non-qualified options with related SARs had been granted with
such terms (4,888,333 in 1994 and 4,506,688 in 1993).

6. PENSION PLAN
The Company has a non-contributory defined benefit pension plan covering
the majority of full-time employees who are at least age 21 and have
completed one year of service. The cost of this program is being funded
currently. Plan benefits are generally based on years of service and
average compensation. Plan assets consist primarily of equity securities
and included 80,000 shares of the Company's common stock at February 28,
1995 and 1994.
The components of net pension expense are as follows:

Years Ended February 28
(AMOUNTS IN THOUSANDS) 1995 1994 1993
Service cost of benefits earned
during the year $4,485 $3,916 $3,286
Interest cost on projected
benefit obligation 2,715 2,351 1,851
Actual return on plan assets (102) (3,632) (1,936)
Net amortization (3,452) 1,212 61
Net pension expense $3,646 $3,847 $3,262

Contributions of $3,710,000, $4,503,000 and $4,883,000 were required in
fiscal 1995, 1994 and 1993, respectively.
Assumptions used in the accounting for the pension plan were:

Years Ended February 28
1995 1994 1993
Weighted average discount rate 8.0% 7.5% 8.0%
Rate of increase in
compensation levels 6.5% 6.0% 6.5%
Rate of return on plan assets 8.0% 9.0% 8.0%

The following table sets forth the plan's financial status and amounts
recognized in the consolidated balance sheets as of February 28:

(AMOUNTS IN THOUSANDS) 1995 1994
Actuarial present value of benefit obligation:
Accumulated benefit obligation
Vested $25,983 $22,549
Non-vested 3,720 2,420
Total benefits 29,703 24,969
Additional amounts related to projected
salary increases 15,910 11,414
Projected benefit obligation for services
rendered to date 45,613 36,383
Plan assets at fair value (37,046) (33,564)
Projected benefit obligation in excess of
plan assets 8,567 2,819
Unrecognized loss from past experience (8,102) (2,597)
Unrecognized prior service cost 981 1,086
Unrecognized net obligation being
recognized over 15 years 1,414 1,616
Accrued pension cost $2,860 $2,924

7. LEASE COMMITMENTS
The Company conducts a substantial portion of its business in leased
premises. The Company's lease obligations are based upon contractual
minimum rates. For certain locations, amounts in excess of these minimum
rates are payable based upon specified percentages of sales. Rental expense
and sublease income for all operating leases are summarized as follows:

Years Ended February 28
(AMOUNTS IN THOUSANDS) 1995 1994 1993
Minimum rentals $118,042 $96,110 $78,184
Rentals based on sales volume 2,513 1,910 1,686
Sublease income (8,875) (8,441) (7,695)
Net $111,680 $89,579 $72,175

The Company computes rent based on a percentage of sales volumes in excess
of defined amounts in certain store locations. Most of the Company's other
leases are fixed dollar rental commitments, many with rent escalations
based on the Consumer Price Index. Most provide that the Company pay taxes,
maintenance, insurance and certain other operating expenses applicable to
the premises.
The initial term of real property leases will expire within the next 25
years; however, most of the leases have options providing for additional
lease terms of from five to 25 years at terms substantially the same as the
initial terms.
Future minimum fixed lease obligations, excluding taxes, insurance, and
other costs payable directly by the Company, as of February 28, 1995, were:

Operating Operating
FISCAL Capital Lease Sublease
(AMOUNTS IN THOUSANDS) Leases Commitments Income
1996 $ 1,502 $ 128,946 $(9,509)
1997 1,541 $ 129,002 (8,748)
1998 1,541 $ 129,266 (7,472)
1999 1,579 $ 127,072 (5,891)
2000 1,662 $ 124,625 (5,358)
After 2000 $23,364 $1,392,326 (33,503)
Total minimum lease
payments $31,189 $2,031,237 $(70,481)
Less amounts representing
interest 17,904
Present value of net
minimum capital lease
payments [NOTE 3] $13,285

In fiscal 1995, the Company entered into sale-leaseback transactions with
unrelated parties at an aggregate selling price of $85,970,000 ($87,980,000
in fiscal 1994 and $69,195,000 in fiscal 1993). The Company does not have
continuing involvement under the sale-leaseback transactions.

8. SUPPLEMENTARY INCOME STATEMENT INFORMATION
Advertising expense, which is included in selling, general and
administrative expenses in the accompanying consolidated statements of
earnings, amounted to $262,969,000, $211,022,000 and $174,167,000 (4.7
percent, 5.1 percent and 5.3 percent of net sales and operating revenues)
in fiscal years 1995, 1994 and 1993, respectively.

9. CREDIT CARD RECEIVABLES AND OFF BALANCE SHEET RISK
The Company uses securitization transactions, which allow for the sale of
receivables to unrelated entities, to finance the consumer revolving credit
receivables generated by First North American National Bank, its wholly
owned credit card bank subsidiary. No gain or loss has been recorded on
these sales. At February 28, the following amounts were outstanding:

(AMOUNTS IN THOUSANDS) 1995 1994
Gross receivables transferred $1,181,954 $727,966
Interest retained by Company (124,206) (98,606)
Net transferred amount $1,057,748 $629,360
Program capacity $1,060,000 $630,000

During fiscal 1995, the Company's credit card bank subsidiary converted two
asset securitization structures for its private-label credit card into a
single master trust that allows the transfer of up to $760 million in
receivables through private placement and the public market. The master
trust vehicle permits further expansion of the securitization programs to
meet future needs. In addition, the Company's credit card bank subsidiary
has an asset securitization program in place for its other bank card
programs that allows the transfer of up to $300 million in receivables.
The finance charges from the transferred receivables are used to fund
interest costs, charge-offs and servicing fees. Certain of the
securitization agreements state that there is recourse to the Company for
any cash flow deficiencies if the monthly credit card cash flows from
finance charges are inadequate to cover the aforementioned expenses. The
Company believes that as of February 28, 1995, no liability existed under
the recourse provision.
In October 1994, the Company entered into interest rate swap agreements
totalling $300 million relating to the public issuance of securities by the
master trust. As part of this issuance, five-year, fixed-rate certificates
totalling $344 million were issued to fund consumer credit card
receivables. First North American National Bank is servicer for the
accounts, and as such, receives their monthly cash portfolio yield after
deducting interest, charge-offs and other related costs. Because the
underlying receivables are issued with a variable-rate finance charge,
interest rate swaps were put in place to better match funding costs to the
receivables being securitized and to preserve net portfolio yield. As a
result, the master trust pays fixed-rate interest while the Company
utilizes the swaps to convert the fixed-rate obligation to a floating-rate,
LIBOR-based obligation.
The fair value of the interest rate swap agreements is the amount at which
they could be settled based on estimates obtained from the counterparties,
which are two banks highly rated by several financial rating agencies. The
fair value of the swaps at February 28, 1995, exceeded face value by
$6,300,000.

10. QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
First Quarter Second Quarter Third Quarter Fourth Quarter Year
(AMOUNTS IN THOUSANDS
EXCEPT PER SHARE DATA) 1995 1994 1995 1994 1995 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales and operating
revenues $1,048,695 $798,950 $1,218,572 $906,678 $1,405,445 $1,018,051 $1,910,235 $1,406,736 $5,582,947 $4,130,415
Gross profit $ 263,677 $215,066 $ 309,617 $240,764 $ 336,049 $ 262,578 $ 475,657 $ 387,248 $1,385,000 $1,105,656
Net earnings $ 19,688 $ 17,230 $ 36,055 $ 27,967 $ 28,442 $ 19,460 $ 83,690 $ 67,743 $ 167,875 $ 132,400
Net earnings per
share $ 0.20 $ 0.18 $ 0.37 $ 0.29 $ 0.29 $ 0.20 $ 0.86 $ 0.70 $ 1.72 $ 1.36
</TABLE>

<PAGE>

Independent Auditors' Report

The Board of Directors and Stockholders of
Circuit City Stores, Inc.:
We have audited the accompanying consolidated balance sheets of Circuit
City Stores, Inc. and subsidiaries as of February 28, 1995 and 1994, and
the related consolidated statements of earnings, stockholders' equity, and
cash flows for each of the fiscal years in the three-year period ended
February 28, 1995. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Circuit
City Stores, Inc. and subsidiaries as of February 28, 1995 and 1994, and
the results of their operations and their cash flows for each of the fiscal
years in the three-year period ended February 28, 1995, in conformity with
generally accepted accounting principles.

s/KPMG Peat Marwick LLP

Richmond, Virginia
April 5, 1995

Management's Report

The Board of Directors and Stockholders of
Circuit City Stores, Inc.:
The consolidated financial statements of Circuit City Stores, Inc. and
subsidiaries have been prepared under the direction of management, which is
responsible for their integrity and objectivity. The consolidated financial
statements have been prepared in conformity with generally accepted
accounting principles and, as such, include amounts that are the best
estimates and judgments of management with consideration given to
materiality.
Management is responsible for maintaining an internal control structure,
designed to provide responsible assurance that the books and records
reflect the transactions of the Company and that its established policies
and procedures are carefully followed. Because of inherent limitations in
any system, there can be no absolute assurance that errors or
irregularities will not occur. Nevertheless, management believes that the
internal control structure provides reasonable assurance that assets are
safeguarded and that financial information is objective and reliable.
The Company's consolidated financial statements have been audited by KPMG
Peat Marwick LLP, independent auditors. Their Independent Auditors' Report,
which is based on audits made in accordance with generally accepted
auditing standards, expresses an opinion as to the fair presentation in
conformity with generally accepted accounting principles of the
consolidated financial statements. In performing its audit, KPMG Peat
Marwick LLP considers the Company's internal control structure to the
extent it deems necessary in order to issue its opinion on the consolidated
financial statements.
The audit committee of the board of directors is composed solely of outside
directors. The committee meets periodically with management, the internal
auditors and the independent auditors to assure each is properly
discharging its responsibilities. KPMG Peat Marwick LLP and the internal
auditors have full and free access to meet privately with the audit
committee to discuss accounting controls, audit findings and financial
reporting matters.

s/Richard Sharp

Richard L. Sharp
Chairman and Chief Executive Officer

s/Michael T. Chalifoux

Michael T. Chalifoux
Senior Vice President, Chief Financial Officer and Corporate Secretary
April 5, 1995

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-END> FEB-28-1995
<CASH> 46,962
<SECURITIES> 0
<RECEIVABLES> 264,565
<ALLOWANCES> 0
<INVENTORY> 1,035,776
<CURRENT-ASSETS> 1,387,161
<PP&E> 850,767
<DEPRECIATION> 257,811
<TOTAL-ASSETS> 2,004,055
<CURRENT-LIABILITIES> 706,120
<BONDS> 178,605
<COMMON> 48,238
0
0
<OTHER-SE> 829,226
<TOTAL-LIABILITY-AND-EQUITY> 2,004,055
<SALES> 5,582,947
<TOTAL-REVENUES> 5,582,947
<CGS> 4,197,947
<TOTAL-COSTS> 4,197,947
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,030
<INCOME-PRETAX> 268,600
<INCOME-TAX> 100,725
<INCOME-CONTINUING> 167,875
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 167,875
<EPS-PRIMARY> 1.72
<EPS-DILUTED> 1.72

</TABLE>