Circuit City announced today they are closing 155 stores and laying off about 17% of the workforce.

The chain has had losses for the last two years, in part due to the fierce battle with Best Buy, and also because of the inroads Wal-Mart has been making on the electronics retail business. But they now blame the downturn on economy as the culprit for the bad performance:

“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 of consumer spending, further impacting our business as well as the business of our vendors. 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 to address the company’s financial situation as quickly as possible.”

Circuit City stock lost 92% of its value in the last 10 months, but got big gains today with the announcements.

The list of closing stores was released this morning. Most are in California, Illinois, Ohio and Georgia (the only out of the four going for McCain).

Just like with the banks, the recession (yeah, it’s ok the say that word) will squeeze players out of niches, and the remaining will be in better position with the upturn. It’s history repeating itself.