- The Washington Times - Tuesday, September 23, 2008

RICHMOND (AP) | The top executive at Circuit City Stores Inc. stepped down Monday and was replaced by a board member appointed to defuse a fierce proxy battle as the struggling electronics retailer continues its turnaround effort.

Philip J. Schoonover, 48, Circuit City’s chief executive, chairman and president, had joined the company in 2004.

He will be replaced by board member James A. Marcum, who will stand in as the chain’s interim president and chief executive. Meanwhile, former tobacco executive Allen B. King will become Circuit City’s new chairman.

“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,” said Mr. King, 62.

Mr. Marcum, 49, was an executive at merchant banking firm Tri-Artisan Capital Partners and one of three directors elected to Circuit City’s board this summer as part of a deal to defuse a proxy battle with Mark J. Wattles, whose investment firm holds a 6.5 percent stake in the company. Last month, Mr. Marcum was appointed Circuit City’s vice chairman.

The Richmond retailer, which is scheduled to report quarterly results Sept. 29, is considering whether to sell the company as it continues on a multiyear turnaround plan.

Mr. King said he hopes Monday’s changes boost that effort.

“The board of directors is committed to accelerating the pace of the company’s turnaround,” he said.

In May, Circuit City announced it hired Goldman Sachs & Co. to explore strategic options, but has never given an official timetable for any action. That move came as the retailer opened its books to Blockbuster Inc., which had made a takeover bid of more than $1 billion for the company. But in July, the Dallas movie-rental chain withdrew its bid because of market conditions.

Blockbuster had proposed the deal with plans to create a 9,300-store chain to sell electronic gadgets and rent movies and games.

Circuit City operates nearly 700 U.S. stores and 775 stores and dealer outlets in Canada.

Also Monday, Circuit City said it will likely post stronger-than-expected results next week for the quarter ending Aug. 31. The company says it now expects its loss from continuing operations to be between $170 million and $185 million for the quarter. That figure excludes any one-time charges.

Circuit City shares climbed 15 cents, or 8.8 percent, to $1.85 in after-hours trading after closing at $1.70 earlier Monday.

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