Challenge to Circuit City Board
Richmond, Va. A shareholder group has proposed the ouster of the entire corporate board at Circuit City Stores Inc. Wattles Capital Management on Friday proposed a clean sweep at the retailer just days after the group nominated five members for Circuit City’s 12-member board.
Investor Mark J. Wattles, the group’s principal and founder of the Hollywood Entertainment video-rental chain, has criticized Circuit City’s restructuring and turnaround attempts. Wattles, which holds a 6.5% stake in the company, also proposed the repeal of any bylaw amendments or new bylaws from the board without shareholder approval.
The company said it would review the requests, “mindful that the proposal would give the shareholder absolute control of the entire board, which would be disproportionate to its relative ownership of the company’s shares.”
“The members of Circuit City’s board are experienced, committed to increasing shareholder value, and vital to the successful implementation of the company’s turnaround plan,” the company said in a statement.
Circuit City reported a $207 million loss in its fiscal third quarter, and anticipates a “modest loss” in the fourth quarter, the period that included the bulk of the crucial holiday-shopping season.
The proposals, if accepted, would be aired during Circuit City’s annual meeting in June.
Home Depot 4Q Sales Decline
Atlanta The Home Depot announced Tuesday that its fourth-quarter profit fell more than 27% and that a suffering housing market contributed to the first annual sales decline for the world’s largest home-improvement store chain.
Home Depot said it earned $671 million in the three months ending Feb. 3, compared with a profit of $925 million in the same period a year earlier.
Despite an extra sales week, revenue in the quarter rose only 1.5% to $17.66 billion, compared with $17.4 billion a year earlier. Excluding that extra week, fourth-quarter sales declined 4.7% compared with a year ago.
Revenue for fiscal 2007 declined 2.1% to $77.35 billion. Spokesman Ron DeFeo said that was the first-ever annual sales decline for Home Depot.
Same-store sales declined 8.3% in the quarter. The company’s average sales ticket declined 2.3% to $54.96 in the quarter, compared with $56.27 a year ago.
The company said it expects to see a total sales decline in fiscal 2008 of 4% to 5%.
Home Depot said it plans to open only 55 new stores this year. That’s about half as many as it opened last year. Home Depot has been scaling back the number of new store openings in recent years.
Dell, Sam’s Club help consumers go green
ROUND ROCK, Texas and BENTONVILLE, Ark. Dell has partnered with Sam’s Club to help consumers offset their impact on their environment when they purchase a laptop or desktop. Through its “Plant a Tree for Me” program, shoppers on samsclub.com can make donations toward reducing carbon dioxide in the air.
Through the program, customers contribute $2 for a laptop and $6 for a desktop, with the money going toward the planting of trees that absorb carbon dioxide from the atmosphere. Dell partners with The Conservation Fund and the Carbonfund.org, non-profit organizations that plant trees in sustainably managed reforestation projects.
“Our success in addressing climate change, energy depletion and other global challenges ultimately depends on our ability to empower and inspire the ReGeneration, people of all ages who care about the environment,” said Tod Arbogast, director of sustainable business at Dell. “Programs like ‘Plant a Tree for Me’ provide a simple and tangible way to make a difference.”