UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 16, 1999
CIRCUIT CITY STORES, INC.
(Exact Name of Registrant as Specified in its Charter)
Virginia 1-5767 54-0493875
(State or other (Commission (IRS Employer
jurisdiction File No.) Identification No.)
of incorporation)
9950 Mayland Drive, Richmond, Virginia 23233
(Address of principal executive offices)
(Registrant's Telephone Number, Including Area Code): (804) 527-4000
No Change
(Former name or former address, if changed since last report)
Item 5: Other Events
The registrant's affiliate, Digital Video Express, LP, announced
on June 16, 1999, that it will cease marketing of the Divx home video system and
discontinue operations, but existing, registered customers will be able to view
discs during a two-year phase-out period.
Management believes that sales at participating Divx retailers
reflect strong consumer interest in the Divx feature. The majority of customers
purchasing DVD players in Circuit City stores, since DVD players with the Divx
feature became available in the fall of 1998, have selected players that include
the Divx option. However, Digital Video Express has been unable to obtain
adequate support from studios and other retailers. Despite the significant
consumer enthusiasm, it cannot create a viable business without support in these
essential areas.
Digital Video Express will provide a $100 cash rebate to all
consumers who purchased Divx-enhanced players prior to June 16, 1999. The rebate
is intended to ensure that no Divx customers have paid more for the
Divx-featured player than they would have paid for the least expensive,
comparable DVD player available at the time of their purchase. All Divx-featured
DVD players are fully functional DVD players and will continue to operate as
such. All Divx discs, including those previously purchased by consumers and
those remaining in retailer inventories, can be viewed on registered players
anytime before June 30, 2001. Subsequent viewings also will be available during
that period.
Circuit City Stores, Inc. is incurring an after-tax loss of
$114.0 million related to the disposal of the Divx business. The loss includes
provisions for commitments under licensing agreements with motion picture
distributors, the write down of assets to net realizable value, lease
termination cost, employee severance and benefit cost and other contractual
commitments.
The foregoing disclosure contains forward-looking statements,
which are subject to various risks and uncertainties, including, but not limited
to, risks associated with the development of new business concepts and risks
associated with year 2000 issues. Additional discussion of factors that could
cause actual results to differ materially from management's projections,
forecasts, estimates and expectations is contained in the Circuit City Stores,
Inc. report on Form 10-K for its fiscal year ended February 28, 1999.
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CIRCUIT CITY STORES, INC
By: /s/Michael T. Chalifoux
Michael T. Chalifoux
Executive Vice President,
Chief Financial Officer and
Corporate Secretary
Date: June 17, 1999
