Circuit City CEO mum on buyout prospects at annual meeting

Mark J. Wattles, whose investment firm holds a 6.5 percent stake in Circuit City, said three companies are in the late stages of conducting due diligence in regard to buying the Richmond-based company.

"The sniffing is over with," Wattles said after the company's annual shareholder meeting.

Wattles declined to identify the companies, but implied that one of those was Dallas-based video-rental chain Blockbuster Inc., which announced a more than $1 billion takeover bid in April with plans to create a chain that would sell electronic gadgets and rent movies and games.

Chief Executive Philip J. Schoonover gave no update to investors about the company's hiring of Goldman Sachs & Co. to explore strategic alternatives, saying there's no official time frame for any action.

Instead Schoonover defended Circuit City's turnaround plan, but acknowledged "some missteps in execution" and asked shareholders for time necessary to leverage the company's future.

"We're in a good industry despite headwinds in the economy," Schoonover said. "All this work is important and rational. We have significant opportunity to improve profitability in our core business."

Shares of Circuit City slipped 2 cents to $3.35 Tuesday after sinking to a 52-week low of $3.20 earlier in the session and tumbling more than 21 percent on Monday. Shares have traded as high as $15.99 over the past year.

Last week, Circuit City said its loss widened in the first quarter because sales at established stores fell more than 11 percent. It reported a loss of $164.8 million in the three months ended May 31 compared with a loss of $54.6 million a year earlier. Circuit City has seen only one profitable quarter since the second quarter of 2007.

Meanwhile, rival Minnesota-based Best Buy Co. reported a 7 percent drop first-quarter profits last week, saying net income dipped to $179 million from $192 million.