Circuit City Investor Calls for CEO Resignation
Richmond, Va. An activist investor on Wednesday said Circuit City Stores Inc. should replace its chief executive and make other changes to help "unlock hundreds of millions of value."
Wattles Capital Management, led by Mark J. Wattles, which owns a 6.5% stake in the company, said in a letter to the board of directors that turnaround efforts under CEO Philip Schoonover were not working and that he should be replaced.
"There is the potential to unlock hundreds of millions of value in the near term and billions of value in the long term for Circuit City stockholders," Wattles wrote. "However, we have serious concerns with the company's current business strategy and operating performance."
In response to the Wattles proposal, Circuit City said in a statement, "The board has received the letter and will respond in due course."
The company reported a $207 million loss in its fiscal third quarter, and anticipates a "modest loss" in the fourth quarter, the period that includes the bulk of th