When Blockbuster Inc. (NYSE: BBI) announced at the start of this week that it would offer over $1 billion for struggling consumer electronics retailer Circuit City Stores, Inc. (NYSE: CC), there were probably quite a few people who were left scratching their heads. Why would two companies in a downward spiral want to combine? Well, to try and save both companies if possible. Other theories have been put forth ad nauseum, but if the takeover does go through, the first order of business should be to toss platitude-spouting Circuit City CEO Phil Schoonover.

Lured from larger competitor Best Buy, Inc. (NYSE: BBY) back in 2004, Schoonover's experience with the largest consumer electronics retailer in the U.S. was seen as helping Circuit City. It hasn't worked out, though: Circuit City has not gained a single inch against Best Buy and it has slowly traveled the road to mediocre and now deplorable performance. Why most of Circuit City's management team exists is beyond me, even with Schoonover trumpeting the "turnarounds" and "we have plans in place" phrases he doles out at every quarterly conference call.

It's too bad -- Circuit City could have been a formidable competitor to Best Buy, but was outmaneuvered at every possible turn by a more nimble (but much larger) competitor. Wattles Capital Management, which at one time was rumored to be looking at a takeover of Circuit City, has wanted the current Circuit City board tossed out for quite some time. Mark Wattles, the owner of Wattles Capital Management, said in a letter to the company's board, "We are confident that the right senior management team with the right strategy and focus would be able to immediately and dramatically improve Circuit City's profitability." Regardless of where Circuit City is headed, one thing is certain: Schoonover and his cronies should dust off their resumes -- not that they are very impressive.

Circuit City Stores, Inc. (NYSE: CC) is an awful business right now, and a big shareholder of the retailer wants Chairman and CEO Philip Schoonover to get the heck out. According to The Wall Street Journal (subscription required), Wattles Capital Management LLC owns 6.5% of Circuit City, and it's getting pretty tired of the CEO's dismal performance.

Bravo to Wattles -- it irks me when chief executives who aren't up to par remain at the helm of the ship. Regular, small-time investors really have no say in anything -- but the big-guy activists can throw their weight around and enter into proxy battles to keep the pressure on management. I completely agree with Wattles and its reasoning regarding the current state of Circuit City, and I hope its efforts will pull the retailer in a new direction and inspire fresh, shareholder-value-enhancing strategies. Easier said than done, of course, but with Circuit City's stock currently stuck below $5 a share, management needs some outside influence.

Circuit City is having a tough time against competitors like Wal-Mart Stores, Inc. (NYSE: WMT) and Best Buy Co., Inc. (NYSE: BBY); its brand equity is definitely suffering. As far as investing in Circuit City goes, it's not even a tiny blip on my radar at the moment; I'll have to wait and see how a turnaround -- if it is genuinely forthcoming -- evolves.

Disclosure: I don't own shares in any of the companies mentioned here; positions can change at any time.