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Wattles Seeks To Stack Circuit City’s Board

Las Vegas — Dissident investor and Ultimate Electronics owner Mark Wattles plans to nominate five directors for election to Circuit City’s 12-member board of directors at the company’s annual shareholder meeting in June, with the goal of replacing the retailer’s management team.

Wattles controls 11 million shares, or 6.5 percent, of Circuit City’s common stock, which he amassed over the past three months. He notified the company of his intentions in a pair of proxy statements filed by his investment firm, Wattles Capital Management, with the Securities and Exchange Commission this week. The filings included a Feb. 26 New York Times article in which Wattles took Circuit’s management to task for the company’s mounting losses and a 76 percent decline in the value of its shares last year.

“The current CEO has been president or CEO for three years now,” he told a Times reporter in reference to chairman Phil Schoonover. “The solution is not in changing real estate; the solution is changing the way they operate in existing real estate.”

Wattles said he has no interest in running Circuit City or merging it with Ultimate Electronics, and that he nominated directors in order to improve shareholder results after executives rebuffed his requests to meet with them.

The slate includes:

  • Anthony Bergamo, who served on the boards of Lone Star Steakhouse & Saloon, the restaurant chain, and the Milstein Hotel Group, a hotel operator;
  • Alexander Bond, managing director of Wattles Capital Management and former finance senior VP of Hollywood Entertainment, the video rental chain founded by Wattles;
  • Don Kornstein, a financial consultant who served as interim chairman of Bally Total Fitness;
  • James Marcum, former chief financial officer of Hollywood Entertainment; and
  • Elliott Wahle, a former Toys “R” Us executive who currently heads a private investment firm and a furniture-import business in Canada.