With disappointments across the company's business lines, Office Depot (NYSE:ODP) announced this morning that CEO Bruce Nelson has resigned.
The surprise announcement comes just weeks after the office supplies retailer significantly cut its third-quarter and full-year earnings forecast (see Office Depot Misses School for Real). The company had lost business to the recent onslaught of hurricanes, and was even forced to shut down its headquarters in Delray Beach, Fla., for four business days. However, as noted, the storms only accounted for $0.01 to $0.02 of the adjusted forecast.
The bigger damage came elsewhere and everywhere.
Office Depot continues to lose ground to bigger rival Staples (NASDAQ:SPLS). Particularly disappointing are the softer-than-expected sales in Europe. And rather than add a sales boost, the key Guilbert contract business acquired last year is showing negative sales growth. What's more, North American contract sales remain stagnant, Viking catalog sales are subpar, and back-to-school sales at the North American retail segment got off to a weak start.
Apparently, the board of directors at Office Depot thought it was time for a change. Investors applauded the move, too, sending shares up more than 1%, and undoubtedly hoping that the next chief will do more to help shareholder value at the firm.
Office Depot said that it has hired Heidrick & Struggles to help find a permanent replacement. In the interim, Neil R. Austrian will serve as CEO and chairman of the board. Austrian has been a board member since the 1998 merger between Office Depot and Viking Office Products, former president and COO of the National Football League, and former co-head of investment-banking firm Dillon, Read & Co.
For more Fool coverage of the office supplies industry, check out:
- Office Depot Shakes It Up and Staples Goes to China?, by Seth Jayson
- Staples vs. Office Depot, by Rick Munarriz
- Staples Guns It, by Alyce Lomax
Fool contributor Jeff Hwang owns none of the companies mentioned above.
