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RadioShack’s CEO Resigns

From Associated Press

RadioShack Corp.'s beleaguered president and chief executive, David Edmondson, resigned Monday after questions about his resume’s accuracy.

The Fort Worth-based electronics retailer said its board accepted his resignation and had promoted Claire Babrowski, executive vice president and chief operating officer, to acting CEO.

Leonard Roberts, RadioShack’s chairman and Edmondson’s predecessor as CEO, said the move was necessary to restore the company’s credibility.

“One of the most important things we have as a corporation is integrity and trust, and we know we have to restore that back to the public,” he said.

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Edmondson issued a brief statement Monday but did not discuss his resume.

“For the last 11 years, it has been my privilege to be associated with RadioShack,” he said. “At this time the board and I have agreed that it is in the best interest of the company for new leadership to step forward so that our turnaround plan has the best possible chance to succeed, as I know it will.”

Edmondson’s troubles began Feb. 14, when errors in his resume were reported by the Fort Worth Star-Telegram. The company’s board said then that it stood behind its CEO, a decision Roberts said he now regretted.

On Wednesday, Edmondson said he took responsibility for the errors. Separately, RadioShack said it would hire outside lawyers to investigate errors in Edmondson’s resume, including claims that he earned two college degrees for which the school he attended had no records.

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That investigation won’t continue because Edmondson quit, the company said. Edmondson, 46, joined RadioShack in 1994 and had been CEO since May.

Edmondson had claimed that he received degrees in theology and psychology from Pacific Coast Baptist College in California, which moved in 1998 to Oklahoma and renamed itself Heartland Baptist Bible College.

The school’s registrar told the Star-Telegram that records showed Edmondson completed only two semesters and that the school never offered degrees in psychology. The school official declined to comment to Associated Press.

Edmondson said Wednesday that he believed he received a theology diploma called a ThG but not the four-year bachelor of science degree listed on his resume. He could not document the ThG diploma.

Roberts said company background checks did not include academic verification in 1994 as they do today.

Roberts said Edmondson’s severance package would be less than $1 million in a cash payout, and he said more details would be released today in a regulatory filing.

The move did not surprise Stacey Widlitz, an analyst at Fulcrum Global Partners Inc., although she didn’t think the change would come on a holiday, as it did on Presidents Day, when financial markets were closed.

“If you think about his tenure, it’s not as if he’s led a turnaround of this company,” she said. “That being said, it would be difficult for the board, considering the things that have come out, to find a reason to keep him.”

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For now, it will be Babrowski’s job to lead a turnaround that begins with closing 400 to 700 stores and two distribution centers as part of a campaign to fix the company’s financial performance.

This plan was announced Friday, when the company also disclosed that its fourth-quarter earnings fell 62%. Its shares tumbled 8% after sinking at midday to a three-year low of $19.08.

Roberts said Babrowski was also a candidate to become the permanent CEO. RadioShack has hired a firm to conduct a nationwide search.


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