Factory 2-U CEO Resigns; Stock Falls 36%

Shares of Factory 2-U Stores Inc. fell sharply Thursday as investors reacted to the unexpected resignation of Chairman and Chief Executive William R. Fields.

The stock fell 63 cents, or 36%, to $1.11 on Nasdaq.

The sell-off came after the San Diego company said late Wednesday that Fields was retiring from his post immediately and would be replaced on an interim basis by Executive Vice President Norman G. Plotkin.

Fields, a former executive at Blockbuster Inc. and Wal-Mart Stores Inc., joined Factory-2-U with much fanfare in November 2002, but the retailer continued to lose money, posting losses in each quarter of his tenure.

In the latest quarter ended Nov. 1, sales fell 9% to $121.9 million from a year earlier. The company, which sells items including apparel, housewares and toys, reported a $3-million loss, its 11th straight quarterly loss.