DALLAS (AP) — Electronics retailer RadioShack Corp. named Julian Day chief executive Friday in hopes the man who pulled Kmart out of bankruptcy can now revive the struggling company that's being squeezed by Best Buy and Circuit City.
"He will have his work cut out for him," said Ulysses Yannas, a broker with Buckman, Buckman and Reid who has tracked the retail industry for nearly 30 years. "If anybody can do it, it's got to be him."
The announcement sent shares of the Fort Worth company up $3.20, or 23 percent, to close at $16.96 on the New York Stock Exchange.
Yannas said it's far too early to begin celebrating, for RadioShack must reinvent itself with a new business model, cut costs and find ways to better manage its inventory.
"It took him about a year to fix Kmart; this will take him longer," he said. "RadioShack is not in bankruptcy, but it's in dire straits and if it continues down this road, they will be in bankruptcy."
Day, 54, will receive $1 million a year in base salary and the option to purchase 4 million shares of RadioShack's common stock at $13.82 a share.
Two million options vest based on the company's stock performance and the length of Day's tenure at RadioShack. For example, if the stock closes at $25 or more for 15 straight trading days, he can exercise 1,333,333 shares, but only if it happens after he's been there three years.
Day replaces David Edmondson, who resigned in February because of questions about claims on his resume. RadioShack declined to provide a copy of Day's resume.