VIDEO: Circuit City store closings to impact Verizon, Virgin: Carriers to lose 143 outlets

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And the news got even more dire this morning following Circuit City’s announcement that it would file for Chapter 11 bankruptcy.

When asked about the closings, Verizon Wireless spokeswoman Brenda Raney said the carrier’s main focus is to find new locations for the Verizon Wireless employees affected by the closures.

Tower Group analyst Charul Vyas said the store closings are not going to have a huge impact on Verizon Wireless.

“I don’t think its really going to affect them very much at all and here’s why,” she said. “Last time I had access to some data, the majority of new customers came from company-owned stores, across the board, regardless of the carrier. I think it ranges from about 60% to over 70% of customers come in through the carrier-owned stores and they’ve got thousands of those across the country.”

Brad Akyuz, of Current Analysis, noted that it could go either way. Verizon Wireless may see a potential setback, but the carrier might also not bat an eye at Circuit City’s decision, especially in stores that were struggling to stay afloat.

“Closing down all those stores does represent a significant hit for Verizon Wireless in that sense that it means we’re looking at a 5% to 6% decline in certain distribution locations,” he said. “It’s a substantial figure. But the close down of these low-traffic struggling Circuit City stores won’t have that adverse impact on Verizon Wireless.”

While the Circuit City news might not be quite earth shattering for Verizon Wireless, Vyas said the situation would have been different if it had been a major retailer like Best Buy or Wal-Mart.

“If it was someone like Wal-Mart closing a ton of stores or just not carrying a certain carrier’s device and offering service, I think that would make more of a difference. That’s where you see a lot more volume these days,” she said.

Virgin Mobile USA downplayed any impact on its operations. “Circuit City stores closing will not affect Virgin Mobile USA as CC accounts for less than 1% of our sales,” said company spokeswoman Jayne Wallace. “Our recent expansion with Sears, WalMart and American Wireless – as well as additional sales as a result of the Helio acquisition – more than offset that.”

Big-box arrangements

Big-box retailers are becoming more involved when it comes to wireless services; Best Buy recently opened a number of new wireless-only outlets, and Wal-Mart nabbed a deal with T-Mobile USA Inc. to sell the HTC Corp.-built G1 that is powered by Google Inc.’s Android platform. However, Vyas noted that being the sole wireless provider at a big retail location might be a bad idea.

“It was probably pretty good for Verizon because if someone walked into the store, there wasn’t very much choice,” Vyas said. “I’m not really sure it would be great for the consumer and maybe that’s one of the reasons why they didn’t get a large number of sales.”

Akyuz commented that big-box retailers that choose to represent multiple carriers up the ante on carrier competition. If an AT&T Mobility customer is considering leaving the carrier, they can visit a Best Buy or a Wal-Mart and do some window shopping with rival carriers.

“[Rival carriers] get the chance to steal that customer away from AT&T if they have the necessary ammunition,” he said. “There are not many exclusive deals around. Circuit City and Verizon Wireless is a unique one.

Circuit City said it began the process of closing stores on Nov. 5 and expects all 155 stores to be closed by the end of the year. The retailed declined to comment on further wireless strategies.

Verizon Wireless’ pending acquisition of Alltel Communications L.L.C. could temper the loss of retail locations as the carrier is expected to re-brand some Alltel locations. Verizon Wireless had no comment on its re-branding strategy.