RSSCircuit City CEO resigns amid more looming bad news
By Sharon Fisher | Published September 22, 2008, 7:12 PM
Presaging dismal second quarter results for next Monday, Circuit City said today that its chairman, president, and CEO Philip J. Schoonover was stepping down, to be replaced by a retail turnaround artist named to the board in June.
James A. Marcum, who has served as vice chairman since August 18, has now been appointed to serve as acting president and chief executive officer.
Marcum has more than 20 years of experience in specialty retail, ranging from operating partner and operating executive of Tri-Artisan Capital Partners, LLC, a merchant banking firm; to Ultimate Electronics, Inc., a consumer electronics retailer specializing in home and car entertainment; and Hollywood Entertainment Corporation, a video home entertainment specialty retailer. He was reportedly named to the board this summer in an effort to prevent another investor, with a 6.5% stake in the company, from waging a proxy battle for control.
The concerns of that investor, and probably others, were cooled when Marcum called for Schoonover's ouster, according to Reuters reports this afternoon.
Allen B. King, who comes from the tobacco industry, was elected chairman of the board. King has been a member of Circuit City's board of directors since 2003 and its independent lead director since June 2008.
The retailer also reminded everyone that its next quarterly results would be released on Monday, and that they were expected to be slightly better than previously announced - meaning the company might lose less than the $170 million to $185 million it had previously stated. A year ago, its loss was $128 million for the quarter.
At its first quarter announcements, Circuit City also said it had "cash, cash equivalents and short-term investments of $92.2 million, compared with $364.1 million at May 31, 2007" -- a $271.9 million decline, which the company said was due to "purchases of property and equipment and cash used in operations." At the same time, the company had $72.6 million in long-term debt, "primarily related to capital leases," and $55.0 million in short-term debt under the asset-based credit facility.
Circuit City had earned a profit during its fiscal fourth quarter, but it was barely over half a percent that of Best Buy -- $4.85 million, compared to $737 million. Circuit City also closed 27 stores during fiscal 2008, but hoped it would recoup losses with factors such as the Olympics and digital television conversion...which, presumably, did not happen.
Schoonover had been named Worst CEO of 2008 by The Wall Street Journal after laying off 3,400 of its highest-paid -- but most experienced -- sales people, which was cited as a major contributor to its 80% stock decline over the course of 52 weeks. Since then, the stock has steadily declined, closing at $1.70 today.
Remember these numbers: "At August 31, the domestic segment operated 705 Superstores and 9 outlet stores in 158 U.S. media markets. At August 31, the international segment operated through 772 retail stores and dealer outlets in Canada." Want to bet they're going to change?
I hope they cut the strings to his golden parachute.
BTW, CC had bought out Radio Shack in Canada and they are known as 'The Source by CC' now, plus they have their CC stores as well.
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|it use to be that the bigger they are the harder they fall.
but the republicans ensure they land softly, that is for a nominal campaign contribution.
if the campaign contributions end, so does their brotherhood.
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|It all started back to Lord Raygun and his trickled on (Do up zipper....) and voodoo economics as well as his deregulation that has carried on for the last 28 years. They don't work, they only create a situation exactly like what is happening now in the end.
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|perhaps, you are right. i will be eager to research your information.
but i had thought that it began with the early days of enron.
if i recall, their first/initial financial executive made enron millions by screwing with the books.
and he made millions too while the gettin was good and many years before the financial books would crash and burn enron, he retired early and while everything still appeared legal and kosher.
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|This is no shock - I'm just surprised he has a company to leave at all. Best Buy feels alive when you walk in - even the security at the front saying hi - which is a great technique to let would be thieves know that they are awake and see you - brings energy to the experience.
http://afewtips.com
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|You are absolutely right afewtips.com, CC feels dead and lifeless compared to BB. I hate that coffin of a store, and they are all the same.
They just don't get it. People like open designs and lots of natural light, they keep it like a casino in BB, lots of noise and commotion and every employee saying hi to you.
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|This past weekend I found a home phone that Best Buy was offering for $15 less than Circuit City on a $35 phone, so I called CC and they said they'd price match BB's price if I ordered on the phone and after checking that BB's item was availabile in my local BB.
After going through the whole ordering process, the rep tells me they only do 100% price match on the phone. To get the 110% price match they mention on their website, I'd have to go to one of their stores with the BB price printed. It would have been nice if they had said that from the beginning, because what is the point of a 100% price match? Why go through the hassle, just to get the same price BB is already offering at the local BB? I cancelled the order and got it from BB directly.
The significantly higher price plus the sleazy way they handled the price matching left a bad taste in my mouth. I have no sympathy for them.
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|When Office Depot has better selection and pricing on computer gear, you know there's blood in the water.
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|One very cool thing about Best Buy and Office Max.
They no longer have Mail-In Rebates.
You walk in the store, get that instant savings and walk on out.
You don't pay sales-tax on the $899 price and then mail in a $200 rebate and be out some money. You pay $699 and that's it.
Nice.
So, I prefer to give my business to Best Buy and Office Max when I can, because I appreciate their policy regarding rebates.
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|On the other hand there are many small businesses with a lot of buying power that prefer to purchase at full price, write it all off as tax at the end of the year (since without being represented by a powerful lobby or other political scum they get screwed enough already) and get the rebates into another account...
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|These are the "Brainiacs" that decided to FIRE their most experienced workers to save money. They figured they could hire n00bs at a much lower wage to start and it would make the shareholders happy.
So wait - who exactly is supposed to be representing the company in your FIREDOG service? What? All the smart people were fired? All the people who actually might have a clue as to what they were doing are NOT the ones assigned to the FIREDOG service?
Errr.... Uhhhhhhh....
How the heck do these Management morons even get hired in the first place? How do they then actually KEEP their jobs and get bonus money and high salaries when they make idiotic decisions like that?
This planet is SOOOO upside-down sometimes. We just gotta go get us a new planet and start things over again - this time, the RIGHT way. :)
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|right..., like a fattened rat abandoning a sinking ship.
surely, the company has been bled for personal gain and fortune and it's time to move on and find another company to boost, as the saying goes in organized crime.
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|wouldnt surprise me one bit.
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