DALLAS – RadioShack Corp.’s embattled president and CEO, David Edmondson, resigned Monday following questions about his resume’s accuracy.
The Fort Worth electronics retailer said that its board accepted his resignation and has 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.
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.”
Report uncovers errors
Edmondson’s troubles began last Tuesday when errors in his resume were reported by the Fort Worth Star-Telegram. The company’s board said it stood behind its CEO, a decision Roberts said he regrets.
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 has no records.
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 the Associated Press.
Edmondson said last Wednesday he believes that 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 it does today.
Roberts said Edmondson’s severance package will be less than $1 million in a cash payout, but said more details will be released today in a regulatory filing.
The move did not surprise Stacey Widlitz, analyst for Fulcrum Global Partners Inc., though she didn’t think the change would come on a public holiday, as it did, 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.”
The company has since removed biographical sketches of its executives, including Babrowski, and replaced it with the following statement: “We are currently updating and validating all of the biographical information for each of our senior executives.”
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 its financial performance.
This plan was announced Friday, when the company also disclosed that its fourth-quarter earnings fell 62 percent. Its shares tumbled 8 percent Friday, after sinking at midday to a three-year low of $19.08.
Roberts said Babrowski is also a candidate to become the permanent CEO; RadioShack has hired executive search firmer Spencer Stuart to conduct a nationwide search.
Widlitz said Babrowski, a former McDonald’s Corp. executive hired last summer, would fit well as CEO, even if it’s temporary.
“She’s the right candidate,” Widlitz said. “I like her approach at how she looks at the business. She walks into a store and wants to see it through the consumer’s eyes.”