ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, May 10, 1996 TAG: 9605100084
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
DATELINE: RICHMOND
SOURCE: Associated Press
Ten of Circuit City Stores Inc.'s executives and board members, including its chairman, sold part of their stock last month, just weeks before the company announced one of its worst monthly sales performances in years, a newspaper reported Thursday.
It was the first time in nearly three years that Chairman and Chief Executive Officer Richard L. Sharp had sold any stock, the Richmond Times-Dispatch said.
Sharp sold 88,432 shares - about 5.6 percent of his 1.58 million holdings - for about $2.6 million April 8, according to filings with the Securities and Exchange Commission. The last time he sold stock was in June 1993.
Vice Chairman Alan L. Wurtzel, son of the electronics retailer's founder, sold 28,000 shares through four trusts for $899,100.
Seven other executives and the board members sold their stock between April 8 and April 16 during one of the few times annually in which the Circuit City directors, officers and key employees can buy or sell company stock.
Top executives and board members are restricted as to when they can sell or buy shares because they might be privy to internal information that could affect the stock price.
Analysts said the timing of the stock sale was unfortunate but the Circuit City executives did nothing improper.
``I would not connect the two events,'' said Saul Yaari, a retail analyst with Minneapolis-based Piper Jaffray Inc. brokerage. ``I think what you have here is some executives taking the opportunity to diversify their holdings and nothing more.''
``It's not like these guys are bailing out on the company or selling huge amounts of stock,'' said H.B. Thompson III, an analyst at Wheat First Butcher Singer Inc. ``They did everything entirely appropriately.''
But Ken Steiner, co-founder of the New York-based Investors Rights Association of America, said corporate executives rarely decide to buy or sell large chunks of stock independent of a company's performance.
``You don't see insiders selling before companies report earnings above expectations,'' Steiner said. Many investors track insider trades to help them gauge how a company is performing, he said.
Steiner added that such transactions by corporate insiders are ``entirely legal and there's nothing you can do about it.''
In all, the executives sold about 186,000 shares of stock - or roughly 0.19 percent of the company's outstanding shares.
The stock sale came weeks before Circuit City announced that sales at stores open at least a year fell 10 percent in April compared with the previous year. The drop was worse than expected.
Those sales, also called same-store sales, are considered the best indicator of a retailer's performance.
LENGTH: Medium: 58 linesby CNB