Circuit City Stores Inc. yesterday said that its chief operating officer was leaving, stepping down less than two weeks after the electronics retailer announced plans to close 19 stores, five regional offices and a distribution center as part of a cost-cutting campaign.
The resignation of John W. Froman came as Circuit City's board of directors was evaluating a recent unsolicited, all-cash $3.25 billion buyout offer from Highfields Capital Management LP. The Boston investment firm owns about 8 percent of financially struggling Circuit City, which is the nation's third-largest dealer of consumer electronics, after Best Buy Co. and Wal-Mart Stores Inc.
Froman, 51, declined through a spokesman to be interviewed yesterday, and in a statement released by the Richmond-based company he did not give a reason for his resignation, which is effective today.
"I feel that now is the right time for me to step aside and pursue other challenges," the statement said. "The company has undergone a remarkable transformation over the years and I have been proud to have been a part of the Circuit City family."
Froman came to Circuit City in 1986 and was named chief operating officer in 2001.
Circuit City Chairman W. Alan McCollough praised Froman's "outstanding ability to motivate others."
Spokesman Bill Cimino said the company would name a replacement soon.
The company operates 617 stores in the United States, including 17 in the Washington region, and more than 1,000 in Canada. Circuit City once dominated the consumer electronics retail market but has been steadily losing customers.
Circuit City said on Feb. 16 that about 430 full-time and 540 part-time employees will be laid off as part of the 19 store closings and cost-cutting campaign. Wall Street analysts have said that these measures may make it harder for Circuit City to compete.
No stores in the Washington area will be closed, the company said.
Yesterday, Circuit City also announced it was terminating its contract with Internet seller Amazon.com Inc.
"Our own Web sales [on www.circuitcity.com] have grown tremendously since we entered into the relationship with Amazon three years ago," Cimino said. "So we are going to spend our time and energy focusing on growing our own business, rather than investing it in growing Amazon."
Circuit City shares closed at $15.63, down 9 cents, in New York Stock Exchange trading yesterday.
