Circuit City Names Wattles' Executive Pick Vice Chairman20 Aug, 2008 By: Erik Gruenwedel
With its stock freefalling and fiscal challenges multiplying, Circuit City Aug. 19 appointed James Marcum to the position of vice chairman.
Circuit City continues to pursue a turnaround strategy that includes possibly selling the company if an appropriate buyer is found and market conditions dictate.
The Richmond, Va.-based No.2 CE retailer reported first-quarter (ended May 31) losses of nearly $165 million, three times the loss ($55 million) it posted during the previous-year period. The chain has posted just one profitable quarter in the past fiscal year.
Spokesperson Bill Cimino said Marcum could help bring “fundamental change” to the company.
Marcum joined Circuit City’s board in June as part of a trio of outside executives forwarded by disgruntled investor Mark Wattles in a proxy fight and settlement between Wattles Capital Management and Circuit City CEO Philip Schoonover.
Wattles owns 6.5% of Circuit City’s stock.
He co-founded Hollywood Video before selling the chain to Movie Gallery for $1.1 billion in 2005. Subsequently he took over control of Denver-based CE retail chain Ultimate Electronics.
Marcum worked with Wattles at both Hollywood Video and Ultimate.
Marcum’s appointment likely means Wattles will have stronger input in Circuit City’s restructuring efforts, according to Tom Arnold, professor of finance at the University of Richmond.
“Assuming a successful turnaround, I see Wattles' group either taking over management entirely or having their stock bought out through an acquisition or a deal negotiated by Circuit City," Arnold told the Richmond Times-Dispatch.
Marcum will be paid $750,000, second only to Schoonover’s $895,000 salary, according to a regulatory filing. He also received a $250,000 signing bonus to help defray temporary living arrangements, and $850 monthly car allowance.