Schoonover Replaced as Circuit City CEO
Tuesday, September 23, 2008
Circuit City Chief Executive Philip J. Schoonover stepped down yesterday as the Richmond-based retailer struggles to find a buyer and faces millions of dollars in losses.
In his place, the company's board of directors named fellow board member James Marcum acting president and chief executive. Marcum joined the board in June and is a former executive of merchant banking firm Tri-Artisan Capital Partners.
"Circuit City has a long history of being a leader in the consumer electronics industry," he said yesterday in a statement. "We believe that by fine-tuning our focus and strategies, we will be able to leverage this history and build a stronger future for the company."
Marcum was nominated to the board by activist investor Mark Wattles, who owns a 6.5 percent stake in the company and has been calling for a shakeup in top management this year. In May, the board agreed to allow shareholders to vote on three of his nominees to the board, with Marcum among them. Marcum has held executive roles at two of Wattles' ventures, retailer Ultimate Electronics and Hollywood Entertainment video rental.
"The board of directors is committed to accelerating the pace of the company's turnaround," new board Chairman Allen B. King said yesterday in a statement.
Circuit City declined to give details yesterday on any severance package for Schoonover, who was paid about $6.5 million including stock and options last fiscal year, according to the company's proxy statement.
Circuit City has been plagued by troubles during Schoonover's two years in the top post. The retailer posted the worst annual results in its history last fiscal year, losing more than $300 million. It is scheduled to release second quarter earnings next week and said yesterday they are slightly better than the previously announced guidance of $170 million to $185 million loss before income taxes.
Spokesman Bill Cimino said yesterday the company is still exploring strategic alternatives, including a possible sale. Circuit City had been in talks with video rental giant Blockbuster this spring, but Blockbuster called off the deal in July after examining Circuit City's books and on concerns about a weak economy.
Schoonover arrived at Circuit City in 2004 from Best Buy, where he had worked for nearly a decade. At Circuit City, he launched a new concept for smaller stores aimed at younger shoppers called the City and developed the company's tech-help service, firedog.