RadioShack ousts its CEO

Posted Wednesday, Sep. 26, 2012  comments  Print Reprints
A

Have more to add? News tip? Tell us

FORT WORTH -- RadioShack on Wednesday unceremoniously dumped Jim Gooch, its CEO of just 16 months who not only failed to turn around the ailing retailer or find a takeover suitor, but saw its performance decline further during his brief tenure.

The removal of Gooch -- a tall, imposing executive who like his predecessor, Julian Day, kept an extremely low public profile in the community -- wasn't wholly unexpected.

"This news does not come as much of a surprise given the company's ongoing operating woes and dismal stock price performance," Dan Wewer, an analyst with Raymond James Equity Research, said in a research note.

Like many established brick-and-mortar chains, RadioShack has struggled to compete with online discounters like Amazon.com, while seeing ever greater competition from big box retailers like Wal-Mart and direct-selling manufacturers such as Apple.

RadioShack's share price has declined 73 percent since Jan. 1, and 84 percent since Gooch took over as CEO. On July 25, the retailer formerly known as Tandy Corp. reported an unexpected $21 million quarterly loss, compared to a $24.9 million profit during the same period of 2011. Its quarterly dividend also was suspended.

The stock (ticker: RSH) was up nearly 2 percent at midafternoon, hours after the announcement.

Gooch was removed with "immediate effect" from his posts as president, chief executive and board member, the company said, without giving any reasons behind the move.

Chairman Dan Feehan said efforts already had begun to find a replacement. He said executive search firms have been narrowed to a short list of several companies. In the meantime, RadioShack's chief financial officer, Dorvin Lively, is interim CEO.

Feehan said no particular event led to Gooch's firing, which he denied was an abrupt action.

"The board decided it was time to move." Feehan, CEO of Fort Worth-based Cash America International, said in a telephone interview with the Star-Telegram. "Anytime the board deals with a leadership change ... it is deliberated, and it took plenty of time,"

He specifically denied a news report that Gooch was removed after making misleading statements.

"Nothing could be farther from the truth," said Feehan, who praised Gooch's character as an executive.

It was apparently a reference to a class-action lawsuit that New York law firm Levi & Korsinsky said it launched this month against RadioShack, claiming Gooch made "materially misleading statements" that hurt investors who bought shares between July 26, 2011, through July 24, 2012.

Gooch was hired by former CEO Julian Day as RadioShack's chief financial officer in 2006, shortly after Day took over. Gooch had worked with Day previously at Kmart and its successor company, Sears Holding.

Unlike Pier 1 Imports, which saw a dramatic turnaround under its CEO, Alex Smith, a career merchant, Gooch was a financial specialist. Considered a number-crunching whiz since childhood in Grand Blanc, Mich., he studied accounting at Michigan State University, then earned an MBA at Northwestern University's Kellogg School of Management.

His departure is the latest among key managers, Wewer noted.

RadioShack's chief merchandising officer, Scott Young, left in June, and the chief marketing officer Lee Applbaum in March.

"Clearly Radio Shack is struggling to address the competitive and product cycle challenges facing its mobile, signature, and consumer electronics businesses," he said.

Barry Shlachter, 817-390-7718

Twitter: @bshlachter

Looking for comments?

We welcome your comments on this story, but please be civil. Do not use profanity, hate speech, threats, personal abuse, images, internet links or any device to draw undue attention. Our policy requires those wishing to post here to use their real identity.

Our commenting policy | Facebook commenting FAQ | Why Facebook?