RadioShack CEO Gooch steps down
FORT WORTH, Texas (AP) — RadioShack said Wednesday that its CEO is leaving under an agreement with the board, the latest blow for the struggling electronics retailer.
RadioShack said James Gooch will step down immediately and is leaving its board of directors. Chief Financial Officer Dorvin Lively will serve as its interim CEO while it looks for a permanent replacement, the company said.
RadioShack has faced declining net income in the past two years. The chain's troubles are partly due to wider problems in the brick-and-mortar electronics industry and add fuel to the notion that selling consumer electronics in brick-and-mortar stores is becoming less and less viable. But RadioShack has also had company-specific problems. In its latest quarter, the company reported an unexpected $21 million loss, as its shift toward selling smartphones and their accessories was not enough to offset a decline in demand in other consumer electronics.
An analyst said RadioShack's structural problems remain. It is shifting from selling more profitable electronic items like cables to less profitable electronics like smartphones, said KeyBanc capital markets analyst Bradley Thomas. Apple's iPhone5 launch, which requires new accessories, could be a near-term benefit for the Fort Worth, Texas-based chain, but he advised taking a "wait and see" approach.
"We continue to see challenges ahead, ... we recommend investors stay on the sidelines until fundamentals stabilize," Thomas wrote, reiterating his "Hold" rating on the stock.
RadioShack Corp. said that it is in the process of hiring an executive search firm to help find a new CEO and that it may consider both internal and external candidates.
Gooch became its CEO in May 2011 as part of the company's succession plan. Gooch, who joined RadioShack in 2006 as its CFO, took over as CEO when Julian Day retired.
RadioShack's stock has been hit hard. Since the beginning of the year, its shares are down 74 percent. The stock dropped to an all-time low of $2.36 in July. Shares rose 3 cents to $2.59 in midday trading Wednesday.
The company said in announcing Gooch's departure that its board and Gooch "have agreed" that he would step down as both CEO and a member of the board.
"We thank Jim for his service to the company and wish him well in his future endeavors," Chairman Daniel Feehan said in the statement.
Gooch was quoted in the same news release as thanking his fellow board members and "everyone at the company for their strong support" and wished them "great success in the future."
RadioShack, which is based in Fort Worth, Texas, has about 4,700 company-run stores in the U.S. and Mexico. It has approximately 1,500 U.S. wireless phone centers and about 1,100 dealer and other outlets worldwide.