When Circuit City began liquidating $1.3 billion in merchandise in early 2009, market observers declared that Best Buy’s long-term growth prospects never looked better.

Two years later, the Minneapolis-based retailer is aiming to reduce its roughly 42 million sq. ft. big-box footprint in the U.S. by 10% over the next three to five years. Stretched consumers and competition from discounters and Internet rivals have contributed to weak sales.

The consolidation could save the company some $70 million to $80 million a year. Best Buy is considering subleasing space in existing stores as one way to achieve the reduction.

Best Buy’s comparable store sales dropped 1.7% in the first fiscal quarter that ended May 28 on a year-over-year basis after growing 2.8% during the same period in 2010.

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