ATLANTA (Reuters) - Circuit City Stores Inc said on Monday that Philip Schoonover, who had been under fire for the past year as financial results weakened, has agreed to step down as chairman, president and chief executive officer, effective immediately.
The board appointed James Marcum to serve as acting president and chief executive, and elected Allen King chairman, the retailer said in a statement.
Marcum, 49, was elected a director at the June annual meeting and was named vice chairman in August. He was nominated to Circuit City's board by entertainment industry investor Mark Wattles, who had called for Schoonover's ouster earlier this year. Wattles' firm owns shares in the company.
King, an ex-tobacco executive who has been on the retailer's board since 2003, said Circuit City, which competes with Best Buy Co
"A change in leadership at the chief executive officer level is always a difficult decision, and Circuit City appreciates Phil's efforts over the past four years," King said in a company statement.
Schoonover, 48, faced pressure over the past year as Circuit City's results weakened and the company became the subject of takeover speculation. Circuit City has reported losses for four of the past five quarters and sales have dropped for more than a year.
The company's stock has swooned 91 percent since January 2007 and now trades at less than $2.
"We believe the goal is to re-invigorate the turnaround effort, improve execution and focus on the right existing strategic initiatives," JPMorgan analyst Christopher Horvers said in a research note.
He said the chances for a big store closing appear remote because of costs to terminate long-term leases.
"While we believe Mr. Schoonover had lost investor (and internal) confidence, and a change was certainly warranted, Circuit City still faces a mountain of challenges, including a structural real estate issue in the midst of a dramatic consumer downturn," Horvers said.
WATTLES CALL FOR CHANGE
Wattles Capital Management, the firm led by entertainment industry investor Mark Wattles, had nominated five people, including Marcum, for election to Circuit City's board earlier this year.
Circuit City reached an accord with Wattles to end his proxy fight in May by agreeing to put forth three of his nominees as board candidates at its annual meeting.
The company received a takeover offer from Blockbuster Inc
The electronics chain also said it expects to report second quarter results that are slightly better than a previous forecast, calling for a loss from continuing operations before income taxes of $170 million to $185 million, excluding charges.
Shares of Circuit City were up 9 percent at $1.86 in after hours trading from their $1.70 close on the New York Stock Exchange on Monday.
(Reporting by Karen Jacobs; Editing by Bernard Orr)
