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Circuit City Losing Top Operational Exec

11/06/2007 08:55:00 AM Eastern

Richmond, Va. — David Mathews, Circuit City’s top operational executive, is leaving the company at month’s end for another job.

Mathews is the CE chain’s merchandising, services and marketing executive VP, a position he was promoted to last February. He is resigning to become president of Orchard Brands, a holding company owned by Golden Gate Capital, a San Francisco-based private equity firm.

For the immediate future, Circuit City’s merchandising, supply chain, services and marketing teams will report directly to chairman/CEO Phil Schoonover.

“I wish to thank Dave for his leadership and many contributions over the past several years, including growing the Circuit City Direct business and starting our catalog business,” Schoonover said.

Mathews, formerly president and COO of Crutchfield, joined the chain in 2005 as president of Circuit City Direct, the company’s multichannel direct sales operation. He was elevated into a new top operational slot following a corporate restructuring in February that streamlined the company’s reporting structure.

In a research note, Goldman Sachs retail analyst Matthew Fassler acknowledged that the impact of Mathews’ departure is mitigated by the fact that the Circuit City’s holiday plans are already in place and that CEO Schoonover is a talented merchant in his own right. Also, senior VP divisional heads John Kelly, merchandising; Peter Weedfald, chief marketing officer; and Marc Sieger, services general manager, all remain in place.

Nonetheless, Fassler described the announcement as a “negative signal” for Circuit City. “A merchant departing less than three weeks before Black Friday is never a good sign or a helpful move for the business,” he observed.

In a statement, Mathews said, “I am proud of the Circuit City team members for their hard work over the past few years. The team has come a long way in transforming Circuit City into a true multichannel retailer, and I feel that the company’s best days lie ahead. The decision to leave was tough, but I have an exciting opportunity to return home to New England and join a leadership team growing a portfolio of direct businesses.”

Golden Gate has about $8 billion in capital under management and operates a diverse portfolio of businesses that spans multiple industries.

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