Office Depot CEO Resigns After 4 Years
Office Depot Inc. Chairman and Chief Executive Bruce Nelson has resigned after four years on the job at the office supply retailer, which has been struggling with lower sales and tough competition from Staples Inc. and OfficeMax.
Neil Austrian, a board member and head of the finance committee, was named to replace Nelson temporarily. The company said in a statement that Nelson had resigned by mutual agreement with the board.
“The lack of execution and focus has been the key reason why we haven’t had the kind of financial performance that the board would expect,” Austrian said.
The nation’s second-largest office supply retailer lowered its earnings expectations for the third quarter and for the year last month, citing lower sales because of hurricane disruptions and soft European business.
The change at the top comes as industry-leading Staples and No. 3 OfficeMax try to expand beyond their regional strongholds after launching big-box retailing for office needs in the 1980s.
Ulysses Yannas, an analyst with Buckman, Buckman & Reid Inc. in New York, said he believed Nelson lost his job over disappointing results from the acquisition last year of Guilbert, Europe’s leading distributor of office equipment and supplies.
Nelson said last month that the Guilbert contract business was posting lower sales than a year earlier.
Yannas did credit Nelson with the success of Office Depot’s Internet business.
A company spokesman said Nelson was not giving interviews. In a statement released by the company, he said, “I firmly believe that the company’s best years are ahead.”
Austrian said during a conference call that he would serve as an “active and engaged” interim chairman and CEO until an executive search firm found a permanent replacement, hopefully early next year.
Austrian, a former National Football League president and onetime executive of investment firm Dillon Read, said he wanted to “jump-start growth” but build profit rather than simply boosting sales.
“Clearly we’re not happy” with the results, he said, while acknowledging that he didn’t have specific improvements to offer. “Improving the prospects of North American retail is the No. 1 priority of the business.”
Office Depot agreed in March to buy 124 Kids R Us stores and expects to open 50 to 55 of them under its red-and-white banner after sorting out all of the real estate issues, including some planned sales and lease restrictions barring a new office supplier, said Charlie Brown, the company’s chief financial officer.
Shares of Delray Beach, Fla.-based Office Depot rose 6 cents to $15.14 on the New York Stock Exchange. The company, founded in 1986, has 1,105 Office Depot stores in 14 countries.
