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RadioShack's Edmondson Resigns

2/20/2006 06:52:00 PM Eastern

Fort Worth, Texas - RadioShack CEO David Edmondson resigned today several days after the company initiated an investigation into irregularities regarding his resume.

After accepting Edmondson’s resignation RadiShack’s board of directors promoted Claire Babrowski to acting president and CEO. Babrowski came to RadioShack last year from McDonald's, where she was senior executive VP and chief restaurant operations officer. She will retain her COO duties.

“This situation is especially painful, because Dave is a talented and dedicated individual who has made many contributions to the company,” said Leonard Roberts, RadioShack executive chairman, in a written statement.  “Dave recognized that major distractions for the company could negatively impact its efforts to implement the company’s turnaround strategy. Undoubtedly, this was a tough decision.”

The investigation into Edmondson’s résumé will cease, Roberts said, adding that the board knew “some, but definitely not all” of the issues raised in the last week.

An executive search team has been appointed to find a successor.

Banc of America Securities retail analyst David Strasser believes the moves "are the first step in the right direction for RadioShack. [Babrowski] was very impressive at [this month's] analyst meeting," he observed, "and it was evident that she drove much of the changes that are set to take place over the next year. Her reputation at McDonald’s was strong and was a contributor to their turnaround. We believe Claire is the benchmark against which all other CEO candidates will be measured. Additionally, we believe Dave Barnes is a high-quality CFO, and will be quite prudent with shareholder capital."

 Roberts also emphasized the board’s support of the new management team and turnaround strategy, announced with the company's fourth quarter earnings results.“We have been monitoring the development of the turnaround plan,” said Roberts. “It’s an excellent strategy. Claire is the right person at the right time to re-position RadioShack, and we believe this team’s professionalism and character will reassure the company’s many audiences.”

Edmondson’s trouble arose after reports in the Fort Worth Star Telegram last week indicated that he never received the two bachelors degrees claimed on his resume and corporate biography.  Edmondson acknowledged the discrepancies in a written statement last week. “The contents of my resume and the company's Web site were clearly incorrect,” he said. “I clearly misstated my academic record, and the responsibility for these misstatements is mine alone.”

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