RadioShack CEO steps down as company tries to hasten revival

Wed Sep 26, 2012 8:43am EDT

A Radio Shack store is seen in Cambridge, Massachusetts April 28, 2008. REUTERS/Brian Snyder

A Radio Shack store is seen in Cambridge, Massachusetts April 28, 2008.

Credit: Reuters/Brian Snyder

(Reuters) - U.S. consumer electronics chain RadioShack Corp (RSH.N) said Chief Executive James Gooch will step down effective immediately, as the company seeks to revive its flagging fortunes.

"The board decided that the timing was right," said company spokesman Eric Bruner.

"Moving forward with the decision sooner rather than later will help establish the right leadership to address the company's challenges," Bruner said.

The change comes at a time when RadioShack is struggling with low margins and vacancies in key executive positions.

The company, whose shares were up 2 percent in pre-market trading, reported an unexpected loss for the second quarter and suspended its dividend to help pay down debt.

RadioShack, once famous as a source of parts and tools for radio and electronics enthusiasts, has been increasingly focusing on selling low-margin phone calling plans and smartphones, particularly the Apple Inc (AAPL.O) iPhone.

The company, which has a market value of about $255 million, was bumped off the S&P MidCap 400 index this week as its market capitalization was too small for it to be included in the S&P 1500. The shares have lost nearly three quarters of their value this year.

RadioShack said its board was conducting a search for a successor and would not rule out internal candidates. Chief Financial Officer Dorvin Lively will be the acting CEO.

Gooch, 44, joined RadioShack as CFO in 2006 and became CEO in May 2011.

RadioShack's stock was up 2 percent at $2.61 in premarket trading.

(Reporting by Juhi Arora and Arpita Mukherjee in Bangalore; Editing by Joyjeet Das and Ted Kerr)

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