RICHMOND, VA. ? Can Circuit City Stores Inc. catch a break?

Industry observers yawned when the consumer electronics chain drew hordes of shoppers during the holiday season’s kickoff — Best Buy Co. Inc. had already surpassed Circuit City with a robust sales performance in the third quarter.

And with holiday retail business slower than expected, analysts say there’s even less to cheer about. They say Circuit City has fallen so far behind market leader Best Buy that it will be difficult to catch up, particularly in a difficult sales environment.

“Best Buy would have to stumble,” said Todd Kuhrt, an analyst with FTN Midwest Research.

Whether Circuit City gets the chance to regain market share and become profitable hinges on turnaround efforts that are still under way. Executives are drastically changing the way the company does business.

“We recognized early on that we needed to change,” said John Froman, the company’s chief operating officer. But, “it wasn’t like we were able to wave a magic wand and change overnight.”

Circuit City has spent more than $100 million redesigning worn-out stores, relocating poor performers and opening new outlets. The No. 2 electronics retailer sold its bank card business for $1.3 billion and narrowed its focus to profitable electronics. Refrigerators, microwaves and low margin software titles have been eliminated from its inventory.

Other changes are more subtle, such as restocking stores so customers can grab the merchandise off the shelves instead of waiting for employees to bring items from store warehouses.

Shoppers browse through merchandise at a remodeled Circuit City store in suburban Richmond, Va. As it approached the critical holiday season, Circuit City started peeling off outdated store designs, ditching its old outlets, and shedding low-margin merchandise with the intention of wresting the No. 1 ranking from Best Buy.

The need to overhaul Circuit City became increasingly evident as Best Buy, with prime locations and a sharper focus, overtook its rival in the mid-1990s. Particularly humbling was Best Buy’s ascent in the Richmond, Va., area — Circuit City’s turf.

“They came in here and kind of leapfrogged us,” Froman said. “We’re out-positioned by our enemies.”

Circuit City hopes to tap emerging markets nationwide that its rival has not found. To help avoid costly mistakes, the retailer has been using business-intelligence software to analyze store and real estate data.

Some analysts say Circuit City is making the right moves — but too late to make a difference in an industry that does not easily forgive missteps.

Analysts Scot Ciccarelli and Rick Weinhart of Harris Nesbitt Gerard said in a report this fall that Best Buy continued to “push the envelope” on competitive pricing as Circuit City struggled with decreasing sales and falling gross margins.