Electronics retailer Circuit City, which has been struggling financially for some time, announced this week it was putting on hold plans to consolidate two existing distribution facilities into a new 1.3 million square foot DC in Scranton, PA, amid the need to conserve cash and the potential that the company will be sold.

The new DC was scheduled to replace existing, fairly automated but smaller facilities in Brandywine, MD, and Bethlehem, PA.

"Plans have evolved," a company spokesman said, adding that management "decided to step back and take a look at it." The company has had substantial losses in recent quarters, and although it rejected a recent takeover offer from Blockbuster, it continues to “explore strategic options” for the business.

The company had previously said the new facility would reduce logistics costs through the increased scale of the larger facility and operation. It was going to operate the facility with just 300 employees.

The leased building was currently under construction and slated to be finished in the fall. The material handling automation system had not yet been installed.

What liabilities Circuit City will have for lease payments or the cancelled equipment orders is not clear. It indicated to local officials that it hoped to open the facility as some point in the future.