NEW YORK – Circuit City Stores Inc. (CC), the No. 2 U.S. electronics chain, Monday said its chief operating officer, John Froman, is resigning, effective March 1, and it has not yet named a successor.
The Richmond, Va.-based retailer also announced that it severed ties with online retailer Amazon.com Inc. (AMZN) because of the growth of its recently redesigned online store, www.circuitcity.com.
An analyst at RBC Capital Markets, Scot Ciccarelli, said Froman's departure could mark a start of a shake-up aimed at putting the retailer back on a growth path.
The departure of Froman, who is also executive vice president, comes as Circuit City weighs a $3.25 billion takeover bid from Highfields Capital Management LP (search). When it unveiled its bid earlier this month, the private investment firm -- which already owns 6.7 percent of Circuit City stock -- had criticized the company for failing to take decisive steps to stem a market shareslide.
Froman, 51, was appointed COO in November 2001 and was responsible for all store operations, real estate, construction, service and distribution, accordingto Circuit City.
The board, Ciccarelli said, has probably made a decision to accelerate any organizational changes it may have been contemplating.
"I'd be surprised if there weren't more changes to occur," he said. He rates Circuit City shares "neutral."
Circuit City, with more than 600 stores, is grappling with stiff competitionfrom top rival Best Buy Co. Inc. (BB), and others, who now include giant discounters like Wal-Mart Stores Inc..
Analysts have often cited factors including poor locations as causes for more than four years of poor sales and inconsistent earnings growth at Circuit City.
Its spokesman, Bill Cimino, said the company expected to announce Froman's successor shortly "but it won't be today."
Stacey Widlitz, an analyst at Fulcrum Global Partners said Froman's resignation was no surprise. She said Circuit City had a few internal candidateswho could succeed Froman, who probably felt sidelined after being passed over inseveral executive promotions at the retailer recently.
Froman could not immediately be reached for comment.
Earlier this month Circuit City promoted former Best Buy executive Philip Schoonover to president, from a prior role of executive vice president and chiefmerchandising officer.
Schoonover, 44, joined Circuit City in October 2004. Before his promotion hewas responsible for the merchandising buying group, supply chain, business development and strategy groups.
"I really don't know if he'll succeed Froman, but it's a possibility," said Widlitz.
Commenting on the scrapping of Amazon.com pact, she said Circuit City probably felt it now had the technology and the brand to sell on the Internet byitself.
Circuit City and Amazon signed an agreement in August 2001 that enabled Circuit City to sell music stereos, DVD players and offer services, including in-store product pickup, to Amazon.com customers.
Before noon, Circuit City shares slipped by 15 cents, to $15.57, on the New York Stock Exchange. Shares of Best Buy, meanwhile, jumped more than 4 percent, or $2.50, to $54.20, after JP Morgan upgraded the stock to "overweight."