Circuit City CEO steps down

Philip Schoonover, chairman, president, and CEO of embattled electronics retailer Circuit City, resigned Monday, the company announced.

His resignation is effective immediately, and he will be replaced by James Marcum as president and CEO, and by Allen King as chairman of the board of directors.

          Philip Schoonover

(Credit: Circuit City)

Marcum joined Circuit City's board in June and was elected vice chairman in August. His specialty is electronics retail--he was selected in order to help the struggling retailer while it tries to right itself. He has helped several other specialty retailers while in the midst of their own turnarounds.

Newly installed chairman King said in a statement, "The board of directors is committed to accelerating the pace of the company's turnaround. Since he joined the board in June, Jim has been very effective in partnering with senior management and in helping identify opportunities to deliver increased value for our shareholders, customers, vendors and associates over the long term. We look forward to his continued contributions in this new important role."

Schoonover became company president in 2005, and ascended to the chairman and CEO's office a year later. But Circuit City has struggled. It posted a $200 million loss in December 2007, and has improved only moderately since then. The company expects to report losses in the range of $170 million to $185 million for the current quarter. Those results will be announced next week.

Earlier this year, a potential savior--albeit an unexpected one--appeared when Blockbuster announced it was interested in taking over Circuit City. The electronics retailer wasn't open to the video rental chain's advances, and one particularly vocal investor publicly encouraged Schoonover to consider the sale to Blockbuster or to a private equity firm.

Blockbuster withdrew its offer in July after perusing the retailer's books.

Circuit City is not the only electronics retailer struggling. CompUSA looked to be rescued when Mexican billionaire Carlos Slim Helu purchased the retail chain, only to close down much of the branches and sell the remaining few to a private equity firm last year, which sold the brand to Systemax.

Best Buy doesn't have the same problem. In the midst of an economic downturn, the company last reported earnings of $737 million.

I will not shop at any business Schoonover gets hired by. Almost as bad as the Home Depot ex CEO. Circuit City firing all of their top salesmen in 2007 was one of the classic business cases of idiocy and will be placed in the appendix of business books for years to come. I think the market and consumers payed them back because of this as well as demonstrated by the poor results. They just aren't Best Buy and really dont specialize in anything, ala Radio Shack. 10 video games, 10 vcrs, 10 tvs, 10 batteries, 10 adapters, 10 satellite players, stragically placed candy in the checkout line, and 2 coke fridges. Radio shack does have the mix boards and custom hot-rod toy cars and cb radio antennas, but other than that, just do not understand their business model any more.
mark

[emmaannasam]

Circuit City has issues with the truth. They have involve the store manager (sic) in any decision,

Radio Shack business model since the '70 has to gouge.

[HlLLARY CLITON]

Circuit City will go out of business I predict, nothing can save them. I think poor management and Wal mart harmed them more than anything else

[Captain-Atari]

After last years shameless layoff strategy that Circuit City used on their most experience employees I stopped shopping there. Whats the point of working at a company any length of time only to be fired for making to much money @ your position. Circuit City shot itself in the foot with that move costing them many of experienced people on the ground as many of these workers might be employed by their Competitors.

[Captain-Atari]

After last years shameless layoff strategy that Circuit City used on their most experience employees I stopped shopping there. Whats the point of working at a company any length of time only to be fired for making to much money @ your position. Circuit City shot itself in the foot with that move costing them many of experienced people on the ground as many of these workers might be employed by their Competitors.

[zanely]

I am so happy that this slime ball who fired all his most experienced people has finally been booted himself. I'm sure he and CC can provide you a long list of reasons why firing your most dedicated and productive employees is a good idea, but it basically comes down to "screw them and make us rich". I hope Circuit City sinks like a rock and all its shareholders forever remember that they fired the very people who could have made their investment work. Buy cheap, get cheap.

[BenjaminGL]

I love how some people are quick to wish death on a company without thinking. I have worked at CC for the past 7 months, and while sometimes it sucks...for me it's a VERY rewarding job. I have won customers from Best Buy, I have return customers who come in on my days off looking for me. I'm a PC Tech and TV specialist and at times it's like I have my own clientelel or something.

If CC went out of business a LOT of GOOD people would be out of a job. I have a family, and I would hate to think about going back out there and looking for a job. I know I could get on at Best Buy if I wanted, but my local best buy is full of high school age kids who don't take the job seriously.

Schoonover, or as well at CC like to call him "Screwover" hurt us as a company, he did nothing but WRONG things and with my time with the company I've seen GOOD and talented managers leave. But with this news it appears that there's a light ahead of us. I don't believe that CC will go out of business anytime soon.

I look forward to winning some customers like you people back, it's going to be a good time.

[Aragon25]

Well said , I was just recently laid off from best buy after 4 years. I also have a family of my own and after struggling with over worked outdoor jobs i am really enjoying my time with the city. When im not selling tvs im a writer and am trying to get some projects published , so for now CC is bringin home some money.This company has a lot of potential , i dont want to be in Worst buys shadow anymore. I have helped so many people and convinced them that i will give them the best service. Ive won customers and i am good at it.When the city was my competitor i made best buys top sales,and with the extra bonus every month here at the city .Im not complaining BB never gave that to its employees.Here everyone does something they dont just sit behind thier office and take 1 or 2 hour lunch breaks BB overworks you for what you get paid. Every morning starts with a manager telling you how your not doing a good job , and instead of motivating you they just insult you and treat everyone like a 2 year old that stole some candy. Again all i want to do is drive this company straight through BB. I know we can do it im already sharing my ideas with managers to see what we can do to be an awesome city...

[laurellb1]

My husband also works at CC and we have 3 children with 1 on the way. It would be very hard to see this company go under for us and for the thousands of employees who work there. Schoonover did make bad decisions, but hopefully things turn around. There are a lot of other companies out there who have gotten out worse situations.

Benjamin, its good CC being good to you now, it just wont be a good job to you in 2 years when you become one of the top salesmen. Reward will be thank you very much, now go please back down the "comparatively paid" retail group. I really can't see how anyone can come in and turn around such a 'marked' company.

[Geena84]

It fathoms me how people can be so negative. It seems as though consumers are hoping that CC will close its door forever as punishment for some bad decisions made by a couple execs. But dont you see its the people still at CC that are the ones being affected. I don't want this company to close.

Despite the problems the Ex-CEO has created I am still so proud to work for CIRCUIT CITY, because I know it's history and I know where it can be in the future. The company, MY company has admitted to its mistakes and is making a concious effort to set things right and recreate a new people centered culture. I am apart of this like so many others, and I have seen the difference. Our economy is in the worst state I have ever seen in my lifetime, if CC closes its doors it will be just one more retailer going out of business adding to the problem. Thousands of more people would be out of jobs increasing the unemployment rate and adding more fuel to plummet all of us into a depression.

This affects ALL of us. So in closing, I just want to address all those nay sayers and challenge you to put yourselves in OUR position (CC employees) and think what if this was YOUR job, your FAMILY, and your Company. Have some compassion and be open to letting all of us at CIRCUIT CITY show you what we can do!

[therightguy34]

I work at circuit city, it's my third year with this crappy company. Let me tell you why cicuit city should and will go under. In my store i have the most incompetent management ever, they spend most of their time taking amongs themselves about non work stuff. They also ignore associates who ask them for help, they hide from customer and lie to them on why they should pay an extra $300 on things they don't need. If there was a defenition for RED FLAG, it's Circuit city management. There also the tools we associates need, there's none. The tag printer always breaks down( why not buy a new on, right?). They employess that are hire leave because they realize how much responsiblities they have without any help from management. I say about 80% of my co-workers now what they are selling ( so much for knowledable help) we will just charge you $149.99 for someone to come to your place to slap on one cable. It's a comimision like job with the stress without any commision. Employess that wise up leave in my store, it's just not worth it. Circuit City is not worth saving. Here's some number for you Store Director makes 120k, Mangers make 25-45k, Supervisors make $16 an hour, normal employes earn $9 an hour. Their cables/ assesories are marked up 300% ( compare to monoprice.com vs circuitcity.com) their warranties are 100% hire than manufactures ( circuitcity.com vs sonystyle.com, look for the 3 year warranty) I can go on and on why this company needs to die!

[buelligan83]

Judging by your pathetic penmenship, I can see why Circuit City is going under. I work for BB and after today's announcement of CC closing 150 stores, I look forward to taking over all your ex-customers.