If Circuit city (NYSE:CC) shareholders (what few there are left) aren't dancing around like it is Mardi Gras, there isn't anything that will make them do it. After almost a year of my pleading, CEO Phillip "Phil The Shill" Schoonover has finally been asked to "pursue other opportunities".
Schoonover, who served as chairman, president and chief executive officer, was brought in from Best Buy (NYSE:BBY) four years ago to turn around Circuit City. Instead, the 48-year-old executive, who was named CEO two years ago, presided over a further deterioration in the company.
The latest blunder was when Blockbuster (BBI) offered to buy Circuit City for $1 billion, or about $6 to $8 a share (it currently trades under $2). It ended in July when the Blockbuster rescinded its offer after Circuit City inexplicably would not open its books. That gaffe followed the replacing (firing) of 10% of the highest-paid, most-seasoned staff in the company's stores, in an effort to reduce costs. It turned out those "high paid" people were the only ones who actually knew how to sell the products in the stores. This was evident when only months later the company begged them to return.
All these of course follow buyout offers of $17 and $23 a share that Schoonover and his merry band of shareholder wealth destroyers dismissed as "too low" and "inadequate". Uh huh.
What is still disappointing here is that it took this long to finally pull the plug. It is a lesson in giving too much power to a person who has not earned it through results. Circuit city has been in a free fall for two years now and every move Schoonover made only increased the downward velocity. It is one thing to have a deteriorating operating environment, it is another to allow management's mistakes to cause conditions to worsen for two years!
Now that this chapter is finally done, we can look at Circuit City. I believe it has a valuable brand, quality real estate in good locations and a valuable franchise in its "Fire Dog" operations. The company has just been abysmally run... I just need to find out more about the current "acting" CEO and wait for the replacement.