(Reuters) - U.S. consumer electronics chain RadioShack Corp RSH.N said Chief Executive James Gooch stepped down, as the once-iconic retailer seeks to revive its flagging fortunes after a series of strategic setbacks.
"The board decided that the timing was right," said company spokesman Eric Bruner.
"Moving forward with the decision sooner rather than later will help establish the right leadership to address the company's challenges."
RadioShack's shares, which have fallen more than 80 percent since Gooch took over last May, were up 0.8 percent at $2.58 in morning trading on Wednesday.
RadioShack, famous in the vacuum tube era as a hangout for radio and electronics enthusiasts, has been increasingly focusing on selling low-margin phone calling plans and smartphones, particularly the Apple Inc (AAPL.O) iPhone.
RadioShack reported an unexpected net loss $21 million for the second quarter and suspended its dividend to help pay down debt.
RadioShack's total debt stood at about $680 million as of June 30.
"There is no sign of fundamental improvement," said Morris Ajzenman of Griffin Securities. "I am absolutely not surprised (at Gooch's departure)," he said.
RadioShack said its board was conducting a search for a successor and would not rule out internal candidates. Chief Financial Officer Dorvin Lively will be the acting CEO.
Finding a new CEO may not be easy, Alan Rifkin of Barclays Capital wrote in a note, saying the new leader would need "unique strategic vision" to fix all of the retailer's problems.
"Furthermore, the duration of the search is uncertain, thus leaving RadioShack in a state of transition," he said.
The company, which has a market value of about $255 million, was bumped off the S&P MidCap 400 index this week as its market capitalization was too small for it to be included in the S&P 1500. The shares have lost nearly three quarters of their value this year.
Chief Financial Officer Dorvin Lively will be the acting CEO to replace Gooch, 44, who joined RadioShack as CFO in 2006.
"(The future) depends on who they bring in and what vision they bring in for the company to turn this cruise ship around. It is no longer cruising, it is sinking," Ajzenman said.
Reporting by Juhi Arora and Arpita Mukherjee in Bangalore; Editing by Joyjeet Das and Ted Kerr