Wattles Eyeing Circuit City?25 Feb, 2008 By: Erik Gruenwedel
An investment company controlled by Hollywood Video founder Mark Wattles Feb. 25 said it submitted a list of five board nominees for struggling consumer electronics retailer Circuit City Stores Inc.
Taking a page out of maverick investor Carl Icahn's playbook, Wattles Capital Management LLC in January bought 11 million shares of Circuit common shares, which represent 6.5% of the retailer's outstanding stock, according to a regulatory filing.
Wattles told The Wall Street Journal he is in “complete disagreement” with Circuit City CEO Philippe Schoonover over how the retailer should resurrect its operations. He said a new board would result in new management that was not at odds with employees and shareholders.
Schoonover earlier this month told Reuters the retailer was not for sale and primed for a “multi-quarter” turnaround.
Wattles, who sold Hollywood Video to Movie Gallery Inc. for $1.1 billion in 2005, has had an interest in CE retail since acquiring majority interest in the bankrupt Denver-based Ultimate Electronics chain.
He continues to operate 20 Hollywood Video stores under a license agreement with Gallery, which Gallery is attempting to rescind. Wattles, separately, has also expressed interest in submitting an alternative restructuring plan for bankrupt Gallery.
Richmond, Va.-based Circuit City, whose stock has plummeted 76% since last year, said, in a filing, it would consider Wattles' nominations. It operates 689 stores in the United States and 786 locations in Canada.
The company is slated to hold its annual shareholder meeting June 24.