La-Z-Boy replaces CEO
Marketing veteran Darrow promoted as Kiser resigns
By Larry Thomas -- Furniture Today, September 15, 2003
Monroe, Mich. — Jerry Kiser, president and chief executive officer of La-Z-Boy, resigned unexpectedly last week amid signs the company is trying to put more emphasis on its sales and marketing efforts.
Kiser, who had been president and CEO since July 2001, was replaced by Kurt Darrow, a 24-year La-Z-Boy veteran who most recently was president of La-Z-Boy Residential, the company's largest business unit.
Darrow, 49, has spent nearly all of his career in sales and marketing-related positions, while Kiser, 56, has an extensive background in operations.
Kiser was president and chief operating officer from 1997 until he was named president and CEO. During his tenure, he guided La-Z-Boy through one of its most difficult periods as the company closed numerous plants and began importing a sizable chunk of its case goods.
During Kiser's watch, the company also implemented a new format for the standalone La-Z-Boy Furniture Galleries stores, aggressively expanded the in-store gallery programs for several of its other brands, and developed a new advertising campaign.
La-Z-Boy Chairman Pat Norton declined to discuss the reasons for Kiser's departure, but praised him as "instrumental in bringing La-Z-Boy through a period of great turmoil in the furniture industry," and noting that Kiser has agreed to assist Darrow and the company's board of directors in the leadership transition.
"I am very pleased that we have an individual of Darrow's talents, experience and reputation in the furniture industry to elevate to this key leadership role," Norton said.
Longtime industry analyst Jerry Epperson of Mann, Armistead & Epperson praised the selection of Darrow, but like many industry watchers, was surprised by Kiser's sudden departure.
"Jerry was an operations and manufacturing guy ... but La-Z-Boy has become a more marketing-driven company," Epperson said.
In an interview with Dow Jones News Service, Norton acknowledged as much, noting that the board "perhaps felt we needed more top-line emphasis."
For the quarter ended July 26, La-Z-Boy's upholstery sales declined 8.5% and case goods sales were off 11.2%.
For the fiscal year ended April 26, sales from all categories totaled $2.1 billion, up about 2% from the previous fiscal year. Upholstery sales for the year rose 3% while case goods sales dropped 13.9%.
In an interview with the Monroe (Mich.) Evening News, Kiser indicated he left voluntarily.
"I've been at it 34 years, and with the economy beginning to make a turn, I thought I'd take a little time off and do some things I haven't done in a long time," he told the newspaper, adding that the illness of two family members also was a factor in his decision.
He said he wasn't sure if he would retire, and would "take some time and re-evaluate some things."
La-Z-Boy spokesman Mark Stegeman said it could be several weeks before Darrow's replacement at La-Z-Boy Residential is named. He said no other management changes are imminent.
John Case, who oversees all upholstery operations as president of the La-Z-Boy Upholstery Group, will remain in that post, Stegeman said.
Darrow spent much of last week in meetings with employees and was not available for comment.
However, he issued a statement noting that the company would refrain from issuing earnings guidance beyond the current quarter, which ends in October. Most analysts are projecting earnings of about 41 cents per share.
"We have seen improvement in the retail furniture environment over the Labor Day selling period, but that does not make a year," Darrow said. "The visibility and sustainability of retail furniture demand continues to be unpredictable. Therefore, we will not provide guidance beyond the current fiscal quarter."
