The announcement of the closure of 155 US stores, by Circuit City Stores Inc is yet another piece of bad news about the tumbling economy, and demonstrates the vulnerability of consumer electronics stores, at a time when people are spending mostly on food and other necessities.

Circuit City had said in late September that it could close stores as part of a turnaround plan and would suspend store openings during the 2010 fiscal year. The company will now exit 12 US markets, including Kansas City with five stores and Phoenix with 13, and it is closing 16 of 17 stores in Atlanta and five of seven in Cleveland.

According to James Marcum, the Richmond, Va., company’s vice chairman and acting president and CEO, “Since late September, unprecedented events have occurred in the financial and consumer markets causing macroeconomic trends to worsen sharply. The weakened environment has resulted in a slowdown on consumer spending, further impacting our business as well as the business of our vendors.”

Helen Bulwik, a retail consultant at New Market Solutions, Oakland, said that in her 35 years in the industry, “I have never seen anything like what is confronting us.”

The closures, which will be complete by year’s end, could put as many as 7,300 employees out of work in what is becoming one of the worst of times. The company had nearly 46,000 employees at the end of February.

Analysts said the company – with its history dating back to 1949 when Samuel Wurtzel opened Wards – Richmond, Virginia's first retail television store - could still seek bankruptcy protection in the next few months.