Circuit City annual meeting comes amid buyout talk

"The company could be sold outright, it could enter into some strategic relationships, it could pare off noncore assets, and it can become more aggressive in rationalizing its store base," he wrote. "In each case, we believe these opportunities would benefit both Circuit City fundamentals and shareholders."

Investors like Wattles Capital Management, which holds a 6.5 percent stake in Circuit City had pressured the company.

Circuit City defused a proxy battle with Wattles by agreeing to put three of its nominees up for election at the annual meeting. The company is asking shareholders to expand its 12-member board by three seats to accommodate the Wattles nominees.

Mark J. Wattles, owner of the 32-store Ultimate Electronics chain, had criticized the company's turnaround effort and demanded the ouster of Schoonover and the entire board. The new directors may exert some of the same pressure, Weinhart said.

"It's going to put a lot of pressure on them to show a strategy and if the strategy is not working, again there's going to be a lot of pressure to change that strategy," Weinhart said. "They may actually bring some insight or some ideas that might bare some fruit over time."

___

On the Net: