Merchants at The Avenue Forsyth greeted Circuit City's decision Monday to close its store in the new upscale mall with a mix of surprise and worry.
"They just opened the building," said Sukai Crook, owner of Dreamy Gelato and Chocolates. "From a perception of the customers, they're going to think, 'Wow, they just opened. That's not a good indicator at all.' That's not going to be good."
Circuit City, one of the three largest tenants in the outdoor shopping center off Peachtree Parkway at Ga. 400's Exit 13 will begin negotiations on a lease termination with developer Cousins Properties.
The local site is one of 19 stores in Georgia, including all 16 in metro Atlanta, and 155 across the country that the electronics retail chain plans to shutter as a result of the economic slowdown. The decision will trim about 17 percent of the company's work force.
Circuit City spokesman Bill Cimino said the pace of clearance sales, which were scheduled to begin today, will determine how quickly the stores close.
"The latest we expect will be the end of the year, but it could be much sooner," he said. "It just depends on how the sales go."
Cimino said employees in the affected stores will be let go, but only "after the sales are completed and everything is through there."
Crook said the decision will not go unnoticed by fellow retailers.
"It's definitely going to have a negative impact," she said. "It's one of our big boxes. We have Circuit City, AMC and Barnes & Noble. When you have one of your anchors closing, of course it's going to have an impact on sales."
Cris Willis leases a nearby lot for her seasonal business, Parsons Christmas Shoppe.
"No shopping center likes to have empty spaces," said Willis, who also owns Parsons Gifts & Collectables in the Lakeland Shopping Plaza in Cumming.
Still, she said, the impact of Circuit City's departure could be minimal given its location.
"It's not a good thing in the shopping center world, but since that space is set off to the side a little bit, I think it won't affect as much traffic for other stores," Willis said.
Crook worried about the timing of the move, noting customers are "already nervous with the economy."
"From a customer confidence point of view, it's going to affect us," she said.
Matt Gove, spokesman for The Avenue Forsyth, remains optimistic.
"I think The Avenue Forsyth is still the leading shopping destination in that market," he said. "Once the space is available, we will certainly be looking to release it."
Gove said the preference would be to fill the pending vacancy with a similar type store, because "it complements the retail mix."
James McCoy, president and chief executive officer of the Cumming-Forsyth County Chamber of Commerce, said it was "a shame" the store was closing, but noted Circuit City isn't "the only business struggling right now."
"At the end of the day, we believe Forsyth County and economy in general are going to move forward and eventually we will be better positioned when things pick back up again," he said.
James A. Marcum, acting chief executive officer of Circuit City, said in a statement Monday attributed the move to "unprecedented events ... in the financial and consumer markets, causing macroeconomic trends to worsen sharply."
"The weakened environment has resulted in a slowdown of consumer spending, further impacting our business, as well as the business of our vendors," he said.
"The combination of these trends has strained severely our working capital and liquidity, and so we are making a number of difficult but necessary decisions."
Six Circuit City locations will remain open in Georgia, including Albany, Augusta and Rome.