Bombay's top exec out
Board says 'change was in order' after sagging results
By Clint Engel -- Furniture Today, August 26, 2002
| Mehrlander |
FORT WORTH, Texas — Carmie Mehrlander has resigned as The Bombay Company's top executive, and the home furnishings retailer said it will "refocus the management of the company."
Mehrlander, who was chairman, president and chief executive officer, resigned two days before Bombay announced lackluster second quarter results and less than a month after the departure of Steve Woodward, senior vice president of merchandising. Woodward left to become president of Illuminations, a candle specialty retailer.
Bombay director Nigel Travis, who heads a committee overseeing the search for Mehrlander's replacement, said the board of directors "unanimously agreed that a management change was in order" given the disappointing results in the first half.
"We had concerns about both sales and bottom-line results," Travis said in a conference call with securities analysts. "We felt we needed to change the momentum of the company."
He said the board hopes to hire an experienced retailer with strong leadership skills as the new CEO, but said it won't rule out a strong candidate without a retailing background. He said the search committee is moving quickly to fill the post and hopes to have a list of candidates by the end of August.
In the meantime, Bombay formed an interim executive committee chaired by Brian Priddy, executive vice president of operations, to run the company.
"The focus of the interim executive committee will be to improve the core business while continuing the successful development and growth of the new business initiatives," the company said. Priddy declined to comment further. Mehrlander could not be reached for comment.
Alex Rotonen, industry analyst with Dallas-based SWS Securities, suggested that she may have been pressured out of the top job. Bombay has been in a turnaround mode for the four and a half years that Mehrlander has been with the company, he said.
"They had a couple of false starts," Rotonen said. "It's taken a little while and the furniture business has long lead times on product," especially at a company such as Bombay that designs its own product, he said.
"This is pure speculation, but I think maybe it was a patience issue by the board," he said.
Rotonen said he doesn't believe her resignation was connected to Woodward's departure or the upcoming earnings announcement. He said Woodward previously owned a business and is an entrepreneur at heart, and it made sense for him to take the opportunity to lead Illuminations.
Mehrlander joined Bombay in February 1998 as president and chief operating officer. She was named CEO in early 2000 and chairman in September 2000 after the death of former Bombay Chairman Robert Jackson.
Bombay's performance under Mehrlander was mixed, and furniture hasn't been much of a shining star. In the fiscal year ended Feb. 2, sales increased 3.3%to $437.5 million, but same-store sales were off 2% and net income fell 56.9% to $3.7 million. Mehrlander called the year an "overall disappointment."
In the fiscal first quarter ended May 4, Bombay lost $3.4 million on $90.9 million in sales. Same-store sales were down 10%.
In March, the company opened its first Bombay Kids store in Dallas. Steve Farley, senior vice president of marketing, said the store has been profitable and called Bombay Kids "a strategic imperative" for the company. Bombay said it plans to open 25 to 30 Bombay Kids stores in 2003 and a total of 100 over the next three years.
Rotonen said the Dallas Kids store "looks very good," and that plans to open one in Chicago next month and six this year still appear to be on track.
Business Editor Larry Thomas contributed to this story.
