LHFI's Carothers steps down; Scott interim CEO
By Clint Engel -- Furniture Today, March 20, 2005
Woodbury, N.Y. — Levitz Home Furnishings Inc. CEO Jay Carothers has resigned, and the company's board has named President Mark Scott interim CEO.
The move followed a downgrade in LHFI's debt rating this month to junk bond status by Standard & Poor's Ratings Services, which cited a "sharp decline in profitability" in the retailer's fiscal third quarter ended Dec. 31.
The company didn't make full results public, but Scott said written sales were down 2.4% and delivered business was down 8.1% from the same period a year ago.
The company, which operates 143 Levitz and Seaman's stores in 11 states, did not offer a reason for the resignation, saying only that Carothers would be returning to North Carolina to spend time with his family.
Scott wouldn't comment on Carothers' departure, and Carothers could not be reached for comment.
LHFI also announced that Sandeep Chugani had joined LHFI as chief operating officer, reporting to Scott, who previously was COO as well as president.
Chugani will be responsible for information technology systems, warehousing, distribution, logistics and store operations. He formerly was a partner of A.T. Kearney, a management consulting company, and has more than 15 years of retail experience.
Also joining the company are Hemant Kalbag as senior vice president of strategic sourcing and direct import operations, and Shishir Agarwal, senior vice president, supply chain. Both are new positions.
Scott said the new executives are "very talented individuals" who worked as consultants for LHFI and "see tremendous opportunity here." He said this gives LHFI three executives "who are really going to give us the kind of management team we need going forward, and we're just thrilled to have them."
In a press release, Scott said Sandeep's expertise and experience in distribution, warehousing and logistics "should improve our distribution and delivery efficiencies and enhance service to our customers."
On March 7, S&P lowered its credit rating on LHFI to CCC from B- with a negative outlook, noting the retailer faced sales pressures from the liquidation of competitors and a weak Los Angeles market. It also said the rating reflected LHFI's participation in a cyclical, highly competitive industry, inefficient operations and poor liquidity, among other things.
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