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You know that point in a football game when a struggling quarterback is pulled from the game? The fans usually cheer the move, even if the backup proves to be worse.
That's where we are in the Circuit City (NYSE: CC ) playbook. Shares rallied in after-hours trading last night, after the struggling consumer electronics superstore chain asked for "a little bit off the top" in its latest haircut.
Philip J. Schoonover, who served as CEO, chairman, and president, is throwing all those hats into the bonfire. He will also resign from the company's board.
Bloodthirsty shareholders may appreciate the public beheading, but will they warm up to the eventual replacement? Vice Chairman James Marcum is filling in as acting CEO, but now the pressure is on to bring in an outsider with pedigree and fresh vision for the company.
That won't be easy. Circuit City needs to think beyond merely hiring a top-level exec out of Best Buy (NYSE: BBY ) who is hungry for a challenge. Some of the best corporate turnarounds have come at companies like Hewlett-Packard (NYSE: HPQ ) , where success came from outside of its PC industry competitors.
So who do I want running Circuit City? It doesn't have to be someone with decades of experience in consumer-electronics retail. Instead of aping Best Buy, Circuit City needs fresh thinking. I would rather see the company go after a proven vet at a company that knows the consumer more than the electronics, like Netflix (Nasdaq: NFLX ) or Apple (Nasdaq: AAPL ) .
Heck, if Blockbuster (NYSE: BBI ) has tired of Jim Keyes, I think he'd be the ideal person to turn Circuit City around. He worked wonders at 7-Eleven but hasn't lit it up at the DVD rental chain. That's not his fault. Show me a successful bricks-and-mortar DVD rental specialist.
Circuit City has a clearer path to a turnaround than the Blockbuster, which walked away from a potential purchase of the retailer. At least in Circuit City's field, there's a proven bricks-and-mortar leader, Best Buy, and even a smaller player like Conn's (Nasdaq: CONN ) is growing nicely.
But why should Circuit City's next CEO be a person at all? How about a nodding bobblehead doll? Heck, even a Jim Cramer bobblehead! Circuit City has a terrible history of refusing buyout offers. It turned down an $8 a share offer in 2003, a $17 a share offer in 2005, and blew a shot at being acquired by Blockbuster for "at least" $6 a share. Isn't it time the company finds a new head that will nod its head at the next buyout offer, even if that head is only attached to a spring coil?
Are you feeling the Cramer bobblehead as CEO? I sure am.
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