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Circuit City

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said late Monday that its CEO has agreed to step down after shareholders called for his ouster following a slower-than-expected turnaround.

The struggling electronics retailer said that Philip Schoonover, who served as chairman, president and CEO, will step down from those positions, effective immediately. Schoonover has also resigned as a director of Circuit City's board.

Schoonover leaves the company he joined four years ago having failed to get it closer to competitor

Best Buy

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Activist investor Mark Wattles, who controls a 6.5% stake in the company, had called for Schoonover's ouster months earlier, arguing that a change in leadership would unlock value for Circuit City. Shares, however, were lately down a penny, or 0.6%, to $1.69 and have fallen 60% in 2008.

Circuit City said its board has appointed James Marcum to serve as acting president and chief executive officer. Marcum was elected as a director at the company's annual meeting of shareholders in June. Allen King has been elected chairman.

"We believe that by fine-tuning our focus and strategies we will be able to leverage this history and build a stronger future for the company," said Marcum in a statement. "It is my mission to direct that energy towards improving our operations and strengthening our market position in order to accelerate our turnaround and deliver improved results for all of our key stakeholders."

Circuit City also said it expects second-quarter results to be "slightly better" than the previous forecast for a pretax loss from continuing operations of $170 million to $185 million, excluding any charges. Circuit City is set to report on its second quarter on Sept. 29.

In April,


( BBI) went public with its offer to acquire Circuit City for roughly $6 a share before ultimately dropping the bid three months later. Shares have languished below $3 a share since Blockbuster pulled its proposal.