Board shift: Chairman steps down at Orchard Supply
William Crowley, chairman of the board of directors of San Jose, Calif.-based Orchard Supply Hardware, resigned as a Class A Director of the company.
The resignation was announced in an Orchard Supply filing with the Securities and Exchange Commission.
On the same day of Crowley’s resignation, June 4, board members appointed David I. Bogage as a member of the board as a Class A Director. Bogage has been the company’s senior VP human resources since April 2011. From February 2009 to January 2011, Bogage was senior VP talent and organizational development of Scotts Miracle-Gro.
Also on the same day of the resignation and appointment, Orchard Supply was notified by the NASDAQ Stock Market that the company is no longer in compliance with a listing rule that requires a majority of the board to be independent directors. The retail company has at least until the end of October to correct the situation, according to the filing.
Shares of OSH were trading at $2.48 at the close of business Tuesday.
Crowley, a member of the Orchard Supply board since 2005, has close ties to Sears Holdings and is currently the president and COO of ESL Investments, the financial company founded by Sears Holdings Chairman Ed Lampert. Crowley was executive VP of Sears Holdings from September 2005 to January 2011, and held various other executive positions with Sears during that time.
Orchard Supply separated from Sears Holdings in December 2011.
Report: Orchard Supply considers bankruptcy option
Orchard Supply Hardware, the historic California brand that has strived to strike a happy medium between big-box home center and friendly neighborhood hardware store, is considering a bankruptcy option, according to a report in Bloomberg News.
The report also says the California hardware chain is continuing talks with lenders over its $261 million debt and lease obligations.
Early last month, the 89-store San Jose, Calif.-based retailer reported a loss of $118.38 million for the full year, as sales declined slightly to $657.3 million.
Orchard opened its first store in 1931 as a co-op for local farmers. It became part of Sears in the mid-1990s, but it was spun off early in December 2011.
Back in February, Orchard Supply issued an update on its efforts to improve its capital structure.
At that time, CEO Mark Baker commented: “We have made significant strides in transforming the Orchard brand and our business since December 2011 when we became an independent public company. At the same time, we recognize that we did not achieve all of our objectives of the past year and that we continue to face challenges ahead. Our team remains highly focused on our five strategic priorities, with particular emphasis on the execution of our merchandising, marketing and store operations initiatives during the important spring season.
Sears Hometown and Outlet slips in Q1
Sears Hometown and Outlet Stores, the former division of Sears Holdings that spun off in October, posted first quarter sales of $601.1 million, down 3.2% from the first quarter last year.
Net income for the quarter ended May 4 was $15.0 million, down from $20.6 million in last year’s first quarter.
Same-store sales of lawn and garden, the retail company’s second-largest category, dropped 45% in the first two months, the company said, as cool weather took its toll. The category improved significantly in April, when it showed comp-store sales gains of 4.2%
"Sales were below last year due to the impact of unusually cool weather in February and March," said Bruce Johnson, CEO and president. He said comps for most other categories, not counting consumer electronics, were positive during the first quarter.
As of May 4, the Hoffman Estates, Ill.-based company operated 1,253 stores. Sears Hometown stores sell appliances, tools, lawn and garden, sporting goods and household goods. Outlet stores are designed to offer discontinued, obsolete, used or reconditioned merchandise at deep discounts.